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Change is inevitable. growth is intentional

VIEWS: 10 PAGES: 93

  • pg 1
									C h a n g e i s i n e v i ta b l e.   growth is intentional.




                                                         annual report 2010
Contents

           Table of content
           From our CEO                                      3

       I   Company Profile of APX-ENDEX                      4

      II   Report of the Supervisory Board                   8

     III   Corporate Governance                             10

     IV    Managing Directors’ Report                       18

           Financial Statements 2010                        26

           Notes to the Consolidated Financial Statements   34

           Other Information                                84

           Auditor’s Report                                 86

           Supervisory Board Members 2010                   88

           Colophon                                         92
Foreword

  without continual growth
 and progress, such words
as improvement, achievement,
and success have no meaning.
        Benjamin Franklin
From our CEO                            APX-ENDEX keeps its course as a
                                        pioneer in market coupling activities,
Dear Reader,                            both in the Day-Ahead and in Intraday
                                        markets as was shown by our co-
I am pleased to present the             operation regarding the Elbas system.
APX-ENDEX Annual Report 2010.           All these activities are aimed at a
                                        fully integrated European energy
The year 2010 was a very busy and       market. This is feasible only together
rewarding year for APX-ENDEX.           with our partners: other energy
Total volumes experienced significant   exchanges, transmission system
growth, a great number of products      operators, regulators, government
were launched, a number of projects     bodies, and most important of all,
were executed and finally Belpex,       the market parties. The next step
the Belgian Power Exchange,             in the process of market integration     during the year, which indicates that     Best regards,
merged with APX-ENDEX.                  is the launch of the BritNed cable,      2010 indeed was an exciting year
                                        due in April 2011.                       for APX-ENDEX but also full of
The integration of the European                                                  achievements. I wish to say thanks
electricity markets was boosted         In the gas markets, 2010 was a year      to the market parties for their
by the launch of the Central West       of steep growth as we saw the break-     continued support, and to our staff       Bert den Ouden
European (CWE) market coupling          through of the TTF hub as the leading    in our offices in Amsterdam, Brussels,    CEO, APX-ENDEX
integrating Benelux, French and         reference price for continental gas,     London and Nottingham for their
German electricity markets in           and the APX-ENDEX Gas futures            hard work and achievements to
November 2010. This was com-            contract becoming the most liquid        make the energy markets work
pounded by an Interim Tight Volume      gas exchange in continental Europe       during the year.
Coupling (ITVC) across Danish-          by more than doubling its volume in
German interconnectors creating         2010, advancing our lead position        The fascinating journey towards
the first integration between the       in the European gas trading.             fully integrated and ever-more
Nordic region and the CWE region,                                                efficient energy markets continues.




                                                                                                                                                Foreword
followed up in January 2011 by a        We have received the ‘Exchange of        The past year was one of the most
second stage of market coupling         the Year’ awards from Energy Risk as     exciting years so far – we look forward
across the NorNed cable.                well as Commodity Business Awards        to what next year brings along!

                                                                                                                                            3
                                                                    APX-ENDEX is one of Europe’s most experienced energy
                                                                    exchanges, operating spot and derivatives markets for
                                                                    electricity and natural gas in the Netherlands, the United
                                                                    Kingdom and Belgium. Established in 1999, APX-ENDEX
                                                                    facilitates the development of liberalised and integrated
                                                                    energy markets in North West Europe by providing
                                                                    an efficient, transparent and secure electronic trading
                                                                    environment for electricity and gas, market data services
Company profile of APX-ENDEX                                        and a wide range of indices.




     The range of products and services     works together with its members,         Estonia and Denmark to the wider            for Continental Europe and the United
     provided by APX-ENDEX has been         other exchanges and Transmission         CWE region. The inclusion of the            Kingdom. A selection of members of
     extended during the past years with    System Operators (TSOs) to provide       NorNed cable between the                    the exchange have seats and take
     the merger between APX and             integrated trading solutions, such       Netherlands and Norway with the             turns to occupy the chair role in these
     ENDEX (APX-ENDEX Derivatives B.V.)     as the market coupling concept           undersea DC-link in January 2011            Development Boards. The main
     in 2008 and consequently with Bel-     and cross-border trading solutions.      was the final milestone of the Interim      function of the boards is to render
     gian Power Exchange (Belpex S.A.)      So far, APX-ENDEX has had a leading      Tight Volume Coupling between the           advice to the APX-ENDEX Executive
     in 2010. The synergy of the three      role in the introduction of various      two regional markets. APX-ENDEX             Board regarding product develop-
     companies’ experience in spot and      market coupling projects. Together       is also heavily involved in the             ment, fees and trading conditions.
     derivatives trading as well as the     with other exchanges and TSOs,           development of market coupling on           If the Development Boards and the
     wide geographic presence have          APX-ENDEX initially introduced           the BritNed electricity cable, linking      Executive Board are in disagreement
     resulted in APX-ENDEX becoming         market coupling for the Dutch, Bel-      the markets of the Netherlands and          they can decide to escalate the
     a leading integrated one-stop-shop     gian and French spot power markets.      the United Kingdom, scheduled to            matter to the Supervisory Board
     energy exchange with its electricity   Proven to be highly successful, the      become operational in April 2011.           of APX-ENDEX.
     and gas products on the spot and       price coupling concept now in-
     derivatives markets, but also making   cludes the German and Luxem-             Stakeholders and shareholders            The Gas & Power Development
     APX-ENDEX the largest Continental      bourgian markets within the Central      With trading members as key drivers,        Boards held seven meetings in 2010:
     European gas exchange.                 West European (CWE) market cou-          APX-ENDEX has its main focus on             three by Continental European




                                                                                                                                                                               Company Profile
                                            pling project that was finalised in      serving the market with an improved         Board and three by UK Board and
     APX-ENDEX remains committed            2010. The Nordic region is connect-      market structure and market quality         one joint meeting of both boards.
     to the realisation of the EU vision    ed to the region through Interim         on an international scale. Therefore,
     of a single, integrated market and     Tight Volume Coupling (ITVC), con-       the company has established              The Gas & Power Development
     APX-ENDEX therefore actively           necting Norway, Sweden, Finland,         Gas & Power Development Boards              Boards have been informed and

                                                                                                                                                                           4
                                                                                                                     the art of progress is to
                                                                                                                 preserve order amid change and
                                                                                                                  to preserve change amid order.
                                                                                                                                 Alfred North Whitehead


have been asked advice on all running,    company and owner of Gas Transport            trading members. The initial margin      segregated into a separate trading
initiated or executed APX-ENDEX           Services (GTS), the Dutch Gas TSO;            requirements for Dutch and Belgian       (APX-ENDEX Power B.V.) and clearing
market related projects in 2010.          Elia N.V. (20.00%), the Belgian electricity   gas are reduced and the interest         (APX-ENDEX Clearing B.V.) entity
The Gas & Power Development               TSO and Fluxys Europe B.V. (3.07%),           conditions on cash collateral held       respectively. Furthermore, all
Boards’ input has been incorporated       the Belgian gas TSO.                          are made more attractive for the         continental gas activities (Dutch TTF
into these projects. In 2010 the Boards                                                 members. It will facilitate cross-       hub, Belgian Zeebrugge hub) were
contributed to significant develop-       APX-ENDEX operates from offices in            margining of the Dutch and Belgian       combined by merging APX Gas NL B.V.
ment relating to market coupling          Amsterdam (headquarters), Brussels,           power Day-Ahead auction, resulting       and APX Gas Zeebrugge B.V. into a
projects, the company’s restructuring,    London and Nottingham.                        in collateral efficiency. Furthermore,   combined entity APX-ENDEX Gas B.V.
the launch of a biomass exchange          In 2010 APX-ENDEX embarked on a               members with multi-market member-        Gas clearing activities have been
and various specific product im-          legal consolidation of its continental        ships benefit from lower clearing        transferred to APX-ENDEX Clearing
provements. During 2010, the Gas          markets and related clearing activities       and technology membership fees.          B.V. as well.
& Power Development Boards did            to achieve better alignment with the
not escalate any issues to the            group’s activities. The UK markets are        The consolidation resulted in a
Supervisory Board.                        to follow at a later stage. The clearing      number of changes to the legal
                                          of Dutch and Belgian gas and power            group structure, including the
The shareholders of APX-ENDEX             is brought under one contractual              structure of the legal entities within
are TenneT Holding B.V. (56.05%),         clearing membership through a                 the group. APX-ENDEX Holding B.V.




                                                                                                                                                                             Company Profile
owner of TenneT TSO B.V., the             single clearing entity, resulting in          (formerly APX B.V.) is now solely
Dutch Transmission System Operator        operational efficiencies.                     providing holding services to the
(TSO) of the high voltage electricity                                                   rest of the group. All trading and
grid; N.V. Nederlandse Gasunie            The consolidation of the spot markets         clearing activities formerly executed
(20.88%), a gas infrastructure            offers a number of benefits for the           by the APX B.V. have now been

                                                                                                                                                                         5
                                                                                The graph on the left outlines the       APX –ENDEX comprises of:                    include 6 months, 6 quarters and
  TenneT          N.V. Nederlandse         Fluxys
                                                                    Elia N.V.
Holding B.V.           Gasunie           Europe B.V.                            new group structure and the legal                                                    5 calendar contracts. The exchange
                                                                                entities as of 4 October 2010.           Power                                       also provides OTC clearing services
                                                                                                                         The Power NL spot market was launched       for the Dutch power future contracts
                                                                                In conjunction with the legal consoli-   in 1999 as the first independent internet   and publishes reference prices.
                              APX-ENDEX                        APX-ENDEX
Belpex S.A.
                              Holding B.V.                     Clearing B.V.
                                                                                dation, APX-ENDEX has significantly      based power exchange in Continental
                                                                                revised its fee structure. APX-ENDEX     Europe. Power NL spot services include      The Power BE futures contracts were
             APX                                  APX-ENDEX                     performed a benchmark review of fee      a Day-Ahead auction and a continuous        introduced in 2004. The Belgian
         Commodities Ltd.                        Derivatives B.V.
                                                                                levels across energy exchanges and       trading facility for Intraday and Strips    power products include 3 months,

                    APX-ENDEX           APX-ENDEX
                                                                                clearing houses, which has resulted in   markets in the Netherlands.                 4 quarters and 3 calendar contracts.
                      Gas B.V.           Power B.V.                             a more competitive and transparent                                                   The exchange also provides OTC
                                                                                fee structure. The variable fees are     The Power UK spot and prompt markets        clearing services for the Belgian
                                                                                now clearly split between a trading      have been operational since 2000 and        power future contracts and publishes
                                                                                and clearing fee and members             were launched as the first independent      reference prices.
                                                                                trading on multiple markets receive      power exchange in the UK. The Power
                                                                                discounts on the clearing member-        UK markets offer an anonymous               The Power UK futures contracts were
                                                                                ship fees. With an involvement of        24/7 marketplace for integrated             introduced in October 2009. Products
                                                                                Gas & Power Development Boards,          trading, clearing and notification          offered are Electricity Forward
                                                                                APX-ENDEX did take member feed-          for spot and prompt power contracts         Agreement (EFA) including 3 months,
                                                                                back into account when setting the       as well as an anonymous auction             4 quarters and 4 seasons contracts
                                                                                new fees. The APX-ENDEX fee struc-       for Day-Ahead contracts.                    as well as 2 Standard Calendar
                                                                                ture can be found on our website                                                     Month (SCM) contracts. Furthermore,
                                                                                www.apxendex.com.                        The Belgian Power market has been           the exchange offers OTC clearing
                                                                                                                         operated by Belpex, the Belgian Power       services as well as reference prices.
                                                                                                                         Exchange, since 2006. The products
                                                                                                                         include a Day-Ahead auction as well         Gas
                                                                                                                         as an Intraday market in Belgium.           The continental spot gas markets
                                                                                                                         Belpex is part of APX-ENDEX since           include Gas NL (TTF) and Gas




                                                                                                                                                                                                                 Company Profile
                                                                                                                         October 2010.                               Zeebrugge. Gas NL operates at the
                                                                                                                                                                     TTF (Title Transfer Facility) hub in
                                                                                                                         The Power NL futures contracts have         the Netherlands and Gas Zeebrugge
                                                                                                                         been offered since 2002. The products       operates at the Zeebrugge hub in



                                                                                                                                                                                                             6
Belgium. The products offered on          of Carbon allowances. Due to the
Gas NL Spot and Gas Zeebrugge             number of fraud incidents on this
include a range of Day-Ahead and          market, APX-ENDEX and Climex                    PowEr               GAS
Within-Day products.                      jointly terminated the trading and
                                          clearing activities on this market on          SPOT NL            SPOT NL
The TTF Gas Futures market provides       1 March 2011.                                  SPOT UK            SPOT UK
                                                                                                                                                gas uK      gas nl     gas nl
a wide range of future contracts on                                                      SPOT BE            SPOT BE                                         Futures

                                                                                       FUTURES NL          FUTURES NL
the Dutch gas market. These products      Clearing                                                                                                power uK
                                                                                                                                                   Futures
                                                                                       FUTURES UK          FUTURES UK                  power uK            power nl power nl
include 3 months, 4 quarters, 6 seasons   APX-ENDEX acts as the central                                                                                     Futures
                                                                                        FUTURES BE
and 4 calendars. The exchange also        counterparty to all spot market                                                                         gas Zee

                                                                                                                                                            power be
provides OTC clearing services for        trades; all contracts are traded                                                                                   Futures   belpex


the Dutch gas future contracts and        anonymously, then cleared and
publishes reference prices.               settled on behalf of its members.
                                          All the APX-ENDEX futures products
The Gas UK market has been providing      are cleared by the European
                                                                                                                  UK                  NL                        BE
trading and clearing solutions for        Commodity Clearing AG (ECC).
                                                                                                           PowEr       GAS    PowEr        GAS       PowEr             GAS
the spot and prompt gas market at
                                                                                      Spot                    √         √         √         √               √           √
the NBP (National Balancing Point)        APX-ENDEX consolidated part of its
                                                                                      Derivatives             √         √         √         √               √           –
since 1999. The On-the-Day                spot clearing activities in October 2010.
                                                                                      Other                Gas storage, injection rights trading
Commodity Market (OCM) is an              This has resulted in a single entity,
                                                                                                           Gas transport capacity rights trading
anonymous, fully cleared, 24/7            APX-ENDEX Clearing B.V., which is                                Data & indices
screen based balancing market.            responsible for the clearing of all the     Exchange & Clearing Carbon (terminated 1 March 2011), OTC give-up
Other products traded on the              continental European spot trades            Services

Gas UK spot market include Gas            at APX-ENDEX; the UK markets to             Market integration   NorNed, BritNed, CWE

in Store and Gas Capacity.                follow in 2011.                             Trading platform     EuroLight / Trayport


Carbon
In 2010 APX-ENDEX offered clearing




                                                                                                                                                                                    Company Profile
and settlement services for Carbon
certificates traded on the Climex
trading platform, (operated by
New Values B.V.), offering spot trading



                                                                                                                                                                                7
                                                                                            In accordance with the Articles of Association of the Company,
                                                                                            APX-ENDEX presents its 2010 annual report. This report has
                                                                                            been drawn up by APX-ENDEX’s Management and audited
                                                                                            by PricewaterhouseCoopers, the Company’s external auditor.
                                                                                            The external auditor’s opinion is that the financial statements
                                                                                            for the year ended 31 December 2010 give a true and fair view
                                                                                            of the financial position of the Company. The annual accounts
                                                                                            have been discussed by the Audit Committee at its meeting
                                                                                            on 2 March 2011, and by the Supervisory Board at its meeting
                                                                                            on 23 March 2011, in the presence of the Executive Board and
Report of the Supervisory Board                                                             the external auditor.




The Supervisory Board proposes to        Meetings of Shareholders. The most            •   The determination of the remunera-             published in April, the closing of       •   The intensifying competition as
the General Meeting of Shareholders      important topics discussed by the                 tion including variable component              the transaction in October including         experienced in several markets and
that the 2010 annual report, and the     Supervisory Board were:                           for the Statutory Directors, and the           regulatory approval involving an             the best ways to respond to these
proposed result appropriation                                                              determination of their targets for 2010;       exchange of shares whereby                   new competition challenges by
incorporated therein, be adopted.        •   The annual report 2009 and the            •   The evolution of the operational               APX-ENDEX enlarged its share in              APX-ENDEX;
Furthermore, the General Meeting             profit allocation;                            and financial results during the year          Belpex to 100% and the consequent        •   The evolution of the strategic land-
of Shareholders is asked to discharge    •   The progress on the implementation            2010 as expressed in the quarterly             integration of the two companies.            scape and various alleys of strategic
the Executive Board in respect of the        of the recommendations from a                 management accounts and market                 As part of the merger, the Belgian           development after the merger
policy followed and the Supervisory          strategic study, including practical          update information;                            electricity TSO Elia acquired a              between APX-ENDEX and Belpex;
Board for its supervision in 2010.           steps to improve the strategic position   •   The functioning of the energy markets          20% share in APX-ENDEX;                  •   The intention to develop a biomass
                                             of APX-ENDEX in its home markets,             in all of the home countries of the        •   The legal restructuring of the               market for wood pellets together
In 2010, the Supervisory Board               in particular by co-operation with            Company: the Netherlands,                      Company leading to a transparent             with the Port of Rotterdam;
convened five times. Apart from four         Transportation System Operators and           the United Kingdom and Belgium,                structure in which trading activities    •   The anticipated move of two offices
regular meetings, one additional             with other exchanges. The progress of         in particular regarding the intensified        are segregated from clearing activi-         in the Netherlands into a single office;




                                                                                                                                                                                                                                  Report of the Supervisory Board
meeting was devoted to the strategy          the implementation of the strategic           market coupling on electricity and             ties, including a restructuring of the   •   The human resources policy;
of the Company. With only a few              study has continuously been monitored;        the perspectives of the ambition               fee schedules to reflect trading and     •   The approval of the budget and
exceptions, all members of the           •   The changes in priorities for the 2010        of the Dutch government for the                clearing fees separately;                    plans for development of the
Supervisory Board have been present at       working plan as were necessitated             Netherlands to become the Gas              •   The strategic potentials in the              Company in 2011, and
these meetings. The Audit Committee          by the compounding, as decided                Roundabout of Northwest Europe;                carbon market including possible         •   The Supervisory Board regulations
and the Remuneration Committee               early 2010, of the CWE market             •   The process regarding the merger               co-operation with, and risks of              and the evaluation of the functioning
also convened frequently during 2010.        coupling and the ITVC market                  with the Belgian power exchange                operating a carbon trading and               of the Supervisory Board.
Supervisory Board members were               coupling, both to be delivered                Belpex as conducted in three steps:            clearing service for carbon
also present during three General            at the shortest possible time;                the declaration of intent as                   exchange Climex;

                                                                                                                                                                                                                              8
During 2010 important steps were          He was replaced by Mr. Dobbeni in        reductions and synergies, structural     In view of the Belpex merger, the      a growing footprint and a
taken in relation to the integration of   the framework of the closing of the      changes of the Company including         different remuneration profiles        European role.
the European markets. Furthermore,        merger transaction between Belpex        the foundation of a separate clearing    between the Netherlands and
there has been a sound growth of          and APX-ENDEX in October 2010.           Company and its capitalisation, the      Belgium were discussed. There were     Amsterdam, 23 March 2011
the traded volumes. On the spot           In Mr. Dobbeni, the Supervisory          risk control framework, the future       also regular meetings with all the
markets, growth exceeded expecta-         Board welcomes a very experienced        IT infrastructure and the risk profile   statutory Directors in the beginning   Supervisory Board:
tions. On the gas derivatives markets,    member from the electricity and          with respect to the carbon clearing      of 2010 regarding the assessment       J.B.M. ten Berge (Chair)
growth was significant. The power         grid operator background with an         activities, which the Company provides   of performance in 2009 and expec-      G.H. de Marez Oyens (Deputy chair)
derivatives market underperformed         international profile.                   to Climex, the audit plan 2010 and       tations for 2010, and at the end of    H.A.T. Chin-Sue
compared to the budget 2010.                                                       the management letter from PwC.          the year regarding the functioning     D. Dobbeni
                                          The following Supervisory Board                                                   and performance in 2010.               R. de Jong
As Mr. Bosman stepped down during         members were present in the Audit        The following Supervisory Board                                                 J.M. Kroon
the year, the Supervisory Board wishes    Committee during 2010:                   members were present in the Remu-        The Supervisory Board wishes to        J.R. Steinhauser
to express its sincere gratitude to       H.A.T. Chin-Sue (Chair)                  neration Committee during 2010:          express its appreciation to the




                                                                                                                                                                                                        Report of the Supervisory Board
Mr. Bosman for his very supportive        J.R. Steinhauser                         G.H. de Marez Oyens (Chair)              Management and staff working at
role over a very long period of time:     R. de Jong                               J.M. Kroon                               all locations (Amsterdam, Brussels,
at the time of the first launch of APX,                                            E. Bosman (until October 2010)           London and Nottingham). T
then named Amsterdam Power                The Audit Committee convened six                                                  ogether, they have achieved a truly
exchange, in 1999; after the carve-out    times in 2010, and discussed the         The Remuneration Committee               integrated APX-ENDEX with strong
of ENDEX in his position in the ENDEX     following main topics: the 2009          convened several times in order to       markets in the Netherlands,
Supervisory Board, and from 2009          annual report, the evolution of the      discuss remuneration topics such         the United Kingdom and Belgium,
again in the Supervisory Board of the     financial position over the year 2010,   as long and short term variable          functioning as a leading energy
re-merged APX-ENDEX combination.          the budget for 2011 including cost       income components and targets.           exchange with a sound yearly profit,

                                                                                                                                                                                                    9
                                                                       These Corporate Governance principles contain an
                                                                       overview of our corporate governance framework as
                                                                       developed and adopted by the Executive Board and
                                                                       Supervisory Board. As a high profile exchange,
                                                                       APX-ENDEX is committed to the highest standards
                                                                       of corporate governance. APX-ENDEX believes that
                                                                       such standards are essential to the integrity and
Corporate Governance                                                   transparency of our business.




1. Corporate Governance                    stakeholders’ and the company’s           2. Board Structure and
at APX-ENDEX                               interests, changes in regulation and      Composition
This report sets out the policies and      best practice.                            APX-ENDEX has a two-tiered board
practice of APX-ENDEX that have                                                      structure, comprising an Executive
been applied during the year.              On 9 December 2003 the Tabaksblat         Board and a Supervisory Board.
As an international organisation,          Committee on Corporate Governance
APX-ENDEX operates under the               presented the Dutch Code which has        2.1. Executive Board
regulatory requirements of several         been updated by revisions that came       The Executive Board exists of four
jurisdictions and organisations,           into force on 1 January 2009. Corporate   statutory directors; Bert den Ouden
including the Dutch Authority              Governance pursuant to the Code           (CEO), Lucas Schmeddes (CFO),
Financial Markets (AFM), the Dutch         comprises good entrepreneurship           Pieter Schuurs (COO) and since
Office of Energy regulation (Energie-      and accountability, which implies an      13 October 2010 also Catherine
kamer) and the UK Financial Services       executive management operating            Vandenborre. The statutory directors
Authority (FSA).                           with integrity and transparency and       are advised by one non-statutory
                                           under adequate supervision.               director. The tasks, duties and
The company’s behaviour should             Applicability of the Dutch Code is        appointment procedure for statutory
reflect the spirit as well as the letter   mandatory for Dutch listed companies.     directors are set out in the Articles




                                                                                                                                  Corporate Governance
of the law since it is fully committed     Even though APX-ENDEX is not a listed     of Association of APX-ENDEX
to govern the company with the             company it has voluntarily adopted        Holding B.V.
highest applicable standards.              the Dutch Corporate Governance
APX-ENDEX’s corporate governance           Code as part of its corporate govern-     The Executive Board is accountable
framework is reviewed regularly and        ance framework to the fullest extent      to the Supervisory Board and
updated accordingly to reflect its         possible and practicable.                 APX-ENDEX’s shareholders for the

                                                                                                                             10
performance of its duties and is           its business, shareholders and all other   APX-ENDEX as executed by the                (including employees) involved in
responsible for the general policy         stakeholders (including employees).        Executive Board and provides advice         or with APX-ENDEX. Additionally,
and the strategy, as well as the day-                                                 to the Executive Board. It is responsible   Supervisory Board members are
to-day management of APX-ENDEX,            2.2. Supervisory Board                     for, amongst others:                        provided with direct access to senior
including but not limited to:              The nature of APX-ENDEX and the            •   approving the annual budget and         executives and external advisors.
•   administering the company’s general    required expertise of the Supervisory          financing, operational- and invest-
    affairs, operations and finance;       Board members are reflected in the             ment plans as submitted by the
•   representing the company               composition profile of the Supervisory         Executive Board;
    when entering into agreements          Board. At all times, there should be at    •   nominating members of the Executive
    on its behalf;                         least four and at the most seven               Board for election by shareholders;
•   monitoring the company’s compli-       members. At present, the Supervisory       •   authorising certain decisions to
    ance with all relevant legislation     Board consists of seven members,               be made by the Executive Board;
    and regulations and managing           who are appointed by the General           •   supervising the policy and actions
    risks associated with the company’s    Meeting of Shareholders. The members           executed by the Executive Board;
    business;                              resign according to a predetermined        •   supervising the general course of
•    reparing operational and financial
    p                                      retirement schedule. Full information          affairs of APX-ENDEX and the
    objectives and strategies;             on the Supervisory Board and its               business it operates.




                                                                                                                                                                               Corporate Governance
•   e
     xecuting of operation plans and      members can be found at the end
    applying sound business practices.     of this report as well as on the           In discharging its duties, the Super-
                                           APX-ENDEX website: apxendex.com.           visory Board aims to take into account
In the execution of its duties, the                                                   the interests of APX-ENDEX, its
Executive Board aims to take into          The Supervisory Board supervises           business, shareholders, other stake-
account the interests of APX-ENDEX,        the general policy and strategy of         holders and all other parties

                                                                                                                                                                          11
3. Executive and Supervisory             3.2. Director Qualifications            Directors is assessed on an annual        at all times as to ensure independent
Board Operations                         All Statutory Directors and Super-      basis by the Supervisory Board.           decision making.
                                         visory Board members have skills,
3.1. Board Meetings                      qualifications, experience and          3.4. Independence                         3.5. Evaluation
The Executive Board meets generally      expertise that are essential for the    Some members of the Supervisory           At least once per year, the Super-
on a weekly basis and may also pass      respective Boards to meet their         Board have an indirect relationship       visory Board evaluates the perfor-
resolutions in writing on a unanimous    responsibilities and obligations.       with the company as a result of their     mance of the Executive Board and
basis. The Executive Board has           Supervisory Board members must          position with companies that hold         its individual members, as well as
regulations in place. The CEO, as        be able to devote a sufficient amount   shares in APX-ENDEX:                      its own performance.
the Chairman of the Executive Board,     of time to prepare, attend and          •   J.M. Kroon, President and Chief
shall see to the adherence of the        participate in the Board meetings.          Executive Officer of TenneT           4. Board Committees
regulations.                                                                         Holding B.V. (shareholder)            Pursuant to the requirements of
                                         3.3. Retirement                         •   H.A.T. Chin-Sue, Member of the        the Dutch Code, the Supervisory
The Supervisory Board meets at           APX-ENDEX has adopted the                   Executive Board and Chief Financial   Board has formed two committees,
least four times per year (or more       recommendation of the Dutch                 Officer of N.V. Nederlandse Gasunie   being the Audit Committee and
often if necessary) and may also         Corporate Governance Code                   (shareholder)                         the Selection, Appointment and
pass resolutions in writing on a         (“Dutch Code”) limiting tenure of           D. Dobbeni, President and Chief       Remuneration Committee.




                                                                                                                                                                        Corporate Governance
                                                                                 •

unanimous basis. Supervisory             Supervisory Board Directors to              Executive Officer of Elia System
Board meetings are generally held        12 years. At present, none of the           Operator N.V. (shareholder)           4.1. Audit Committee
at the company’s offices in Amsterdam.   Supervisory Board directors have                                                  The Supervisory Board has selected
The Supervisory Board has regula-        served for more than 12 years. For      The Supervisory Board shall, how-         three of its members to form an Audit
tions which are published on the         Statutory Directors there is a tenure   ever, ensure that a majority of its       Committee, being H.A.T. Chin-Sue,
APX-ENDEX website.                       policy and performance of Statutory     members shall be independent              J.R. Steinhauser and R. de Jong.

                                                                                                                                                                   12
Rules have been set for the way         financial expertise to act effectively.   policies, procedures and controls to
the Committee operates. The Audit       At least one is a financial expert.       enhance a system of risk oversight,
Committee assists and advises the                                                 risk management and internal control.
Supervisory Board in decision making    4.2. Selection, Appointment and           It is the responsibility of the Audit
and reports its findings to the         Remuneration Committee                    Committee to monitor and assist this
Supervisory Board. The Audit            The Supervisory Board has selected        internal framework.
Committee convenes at least two         three of its members to form a
times per year.                         Remuneration Committee, being             5.1. External auditor
                                        G.H. de Marez Oyens, J.M. Kroon and       PricewaterhouseCoopers (PwC)
The Audit Committee is charged          D. Dobbeni. The Committee assists         has been appointed as external
with monitoring the adequacy and        and advises the Supervisory Board         auditor and is required to provide an
effectiveness of APX-ENDEX financial    in decision-making and reports its        Auditor’s report and Management
reporting, its financial reporting      findings to the Supervisory Board.        Letter for each of the APX-ENDEX
policy and procedures, its internal                                               group companies.
control framework, risk management,     5. Controls and Procedures
the independent external audit of       APX-ENDEX has implemented a               The external auditor also attends the         the strongest
the financial statements and the        number of policies that address key       Audit Committee meetings and the         principle of growth lies




                                                                                                                                                           Corporate Governance
performance and valuation of the        aspects of corporate governance,          Supervisory Board meeting in which
                                                                                                                               in human choice.
external auditor.                       such as a personal account dealing        the Annual Report is discussed.
                                        policy, a code of conduct and a whistle   The General Meeting of Shareholders             George Eliot
Given the specific tasks of the Audit   blowing policy. Additionally,             has the right to question the external
Committee, its members have             APX-ENDEX is committed to a sound         auditor on the reporting including
sufficient business, industry and       framework of internal risk management,    the auditor’s report stating that

                                                                                                                                                      13
the financial statements give a true       Once every three months, the           operating budgets, investment          Board, consisting of minimum two
and fair view of the financial position.   Executive Board reports on the         plans and financing requirements.      (mandated) statutory directors, and
                                           results and status of business         The consolidated business plan is      four expert business executives.
All other services provided by PwC         activities to the Supervisory Board    subsequently approved by the           The Clearing Management Board
comply with independent auditor            and the Shareholders.                  Supervisory Board and the General      is responsible for the general policy,
requirements. The guidelines of                                                   Meeting of Shareholders, as laid out   strategy and oversight of APX-ENDEX
the Royal Netherlands Institute of         The key strategic risks to which       in the Articles of Association.        Clearing and Settlement arrangements.
Chartered Accountants (NIVRA)              APX-ENDEX is exposed include:
require a switch to a different external   •   adverse change to the political,   New business activities and invest-    The Clearing Management Board’s
auditor once every seven years in              legal and regulatory environment   ments that are outside the scope of    remit is the entire APX-ENDEX and
the interest of independence. This             in which it operates; and          the approved business plan require     any joint ventures which may be
requirement is also in line with the       •   consequences of increased          specific approval by the Supervisory   entered into. The Board consists of
Dutch Code.                                    competition in the European        Board and the Shareholders.            APX-ENDEX’s CFO, COO, Head of
                                               exchange sphere.                   The Audit Committee monitors the       Risk and Compliance, Head of Market
5.2. Internal control framework                                                   quality of the financial reporting     Surveillance & Operations, Finance
The Executive Board is responsible for     APX-ENDEX has set a framework for      and internal controls. The Audit       Manager and Corporate Lawyer,
developing the company’s strategy          policies regarding internal control    Committee together with the            with additional attendance by




                                                                                                                                                                       Corporate Governance
and achieving business objectives,         processes. The Executive Board is      Executive Board discusses the annual   appointed expert business executives.
operating within relevant rules and        responsible for managing processes     report and the underlying accounting   Other persons attend meetings of
regulations, managing the business         within this framework for APX-ENDEX    principles on an annual basis.         the Board from time to time if this
risks, and is accountable to the           and its subsidiaries. All companies                                           is considered desirable to assist the
Supervisory Board and the General          within APX-ENDEX are required to       APX-ENDEX Clearing B.V. is led by      Board in the fulfilment of its duties.
Meeting of Shareholders.                   prepare annual plans including         a dedicated Clearing Management        A review of its performance is

                                                                                                                                                                  14
conducted annually, to ensure that        project to subject certain key opera-    ment and management, transaction
the Board is provided with sufficient     tional controls to internal audit.       processing, default management
resources to undertake its duties                                                  and financial processes. The risk
and responsibilities, as specified in     Having assessed its internal risk        management and control systems
the Board’s Terms of Reference.           management and control systems, the      provide reasonable assurance that
                                          Executive Board is of the opinion that   all material risks and corresponding
During 2010 APX-ENDEX continued           the company’s risk management and        measures have been identified and
the process of harmonising its internal   control systems provide reasonable       assessed. Within these arrangements,
control framework. Progress included      assurance that this annual report does   responsible individuals are required
the further development of the            not contain material inaccuracies.       to make a formal statement to the
internal control framework, drawing                                                management board surrounding
upon the widely used COSO                 The internal risk management and         the adequacy and effectiveness
integrated framework for internal         control system also addresses            of the controls for which they are
control, which monitors approxi-          operational and compliance risks.        responsible. Where material gaps
mately 250 business risks on a half-      The major compliance objectives of       between risks and measures have
yearly basis. Features of the frame-      the company relate to tax, energy        been identified, actions are being
work include periodic analysis of         industry regulation and financial        undertaken to close these gaps.




                                                                                                                               Corporate Governance
risks to the business objectives          services regulation. The major
of APX-ENDEX and an integrated            operational objectives of the            5.3. Code of Conduct
system of risk and control monitoring     company relate to core business          The Dutch Code stipulates that
and reporting. To develop these           administration and planning, ‘macro’     a Code of Conduct should be in
arrangements further, APX-ENDEX           external factors, project management,    operation at listed companies.
is currently establishing a pilot         customer relations, systems develop-     APX-ENDEX has decided to adopt

                                                                                                                          15
this aspect as well, albeit placing        6. Non-Compliance with the                 policy with respect to corporate social   tion report of the Supervisory Board
it in a broader context, with the          Corporate Governance Code                  reaponsibility. These aspects have        is not to be published externally but
core values ‘pioneering’, ‘rigour’,        In accordance with the Dutch Code,         been discussed in detail during the       is submitted to the General Meeting
‘integrity’ and ‘market orientated’        an explanation is set out below, of        general meeting of shareholders           of Shareholders. The most important
commanding a prominent position            why and to what extent the principles      and are disclosed on a high level in      elements of the report are included
in the APX-ENDEX Code of Conduct.          and best practice provisions as per        the Managing Directors’ Report.           in the notes to the financial statements.
The Code of Conduct is imple-              the Dutch Code are not complied
mented and can be found on the             with by APX-ENDEX.                         II.2.2                                    II.2.14
APX-ENDEX website.                                                                    Scenario analyses have not been           The main elements of the contracts
                                           Executive Board                            carried out explicitly in designing the   with members of the Executive
5.4. Whistleblower Regulations             II.1.1                                     remuneration structure. Remuneration      Board are not made public as
The Dutch Code recommends that             APX-ENDEX is moving to a policy            elements are capped and the company       APX-ENDEX is not a listed company.
a set of Whistleblower Regulations         of appointment with a maximum              takes a long-term view in granting        The notes to the annual accounts
should be in place for all listed          duration of 4 years. Current appoint-      remuneration elements.                    shall contain the information pre-
companies, so as to make it possible       ment contracts are for a duration                                                    scribed by law on the level and
for employees to report alleged            ranging from 4 to 6 years.                 II.2.4 - II.2.7                           structure of the remuneration of
irregularities of a general, operational                                              APX-ENDEX does not operate a              the individual managers.




                                                                                                                                                                                 Corporate Governance
and/or financial nature within the         II.1.2 & II.1.6                            system of remuneration in the form
company without their legal status         The Managing Directors’ Report does        of share options.                         Supervisory Board
being jeopardised. APX-ENDEX has           not explicitly refer to the requirements                                             II.1.8
also implemented a whistle blowing         for realising the group’s strategy,        II.2.12, II.2.13                          The Report of the Supervisory
policy which can be found on the           including a sensitivity analysis on        Given the fact that APX-ENDEX is          Board does not disclose details on
APX-ENDEX website.                         external variables and the group’s         not a listed company, the remunera-       the strategic discussions held by the

                                                                                                                                                                            16
committee. Given the fact that             General Meeting of Shareholders
APX-ENDEX is not a listed company,         Many of the ‘best practice’ principles
the details discussed by the Super-        pertaining to the General Meeting
visory Board are not to be published       of Shareholders apply to entities
externally but are submitted to the        that are listed on a stock exchange.
General Meeting of Shareholders.           APX-ENDEX is not listed and there-
                                           fore did not apply these principles.
III.2.1
Some members of the Supervisory            Internal audit
Board have an indirect relationship        V.3.1 - V.3.2
with the company as a result of their      Owing to the size of its business,
position with companies that hold          APX-ENDEX has not established
shares in APX-ENDEX Holding B.V.           an internal audit function to date.


III.7.1, III.7.2                           V.3.3
These provisions deal with share-          During 2010, APX-ENDEX reviewed
                                                                                        growth itself
                                                                                      contains the germ
holdings by Supervisory Board              the need for an internal audit function,




                                                                                                               Corporate Governance
members, which are not applicable.         and took the decision, in conjunction
                                           with the audit committee, to establish       of happiness.
III.8.1 - III.8.4                          a pilot project, during 2011, to subject
These provisions deal with a single-tier   certain key operational controls to            Pearl S. Buck
administrative set-up and are there-       internal audit.
fore not applicable to APX-ENDEX.

                                                                                                          17
Managing Directors’ report


   1. Corporate developments                gration of the two companies              and TSOs regarding the importance           the successful 700 MW cable linking
   2010 was a very exciting year for        was finalised in October 2010.            of market integration towards a single      the Netherlands and Norway,
   APX-ENDEX as a number of key             The merger was welcomed by the            integrated European electricity             launched in January 2011, and the
   milestones were achieved. The total      market participants who acknowl-          market. Earlier on, the trilateral market   Benelux Intraday market coupling
   volumes as well as the number of         edge the wide range of products           coupling, connecting the markets of         based on the well-proven Elbas system
   memberships of the exchange              offered and the synergies that the        the Netherlands, Belgium and France         in co-operation with Nord Pool Spot.
   experienced significant growth,          new combination brings but also           from 2006, had seen great results,
   a large number of products and           the strong geographic presence            operated successfully by APX and            BritNed, the 1000 MW interconnector
   initiatives were launched and finally,   of the exchange in the Netherlands,       Powernext since its launch. The next        providing an electricity link between
   APX-ENDEX merged with Belpex,            the UK and Belgium.                       phase in price coupling for the CWE         Great Britain and the Netherlands,
   the Belgian Power Exchange.                                                        region, comprising the Netherlands,         is planned to go live in April 2011.
                                            2. International Developments             Belgium, France, Luxembourg                 Significant progress has been made
   The year 2010 witnessed growth of        The year 2010 saw a landmark in the       and Germany, was launched on                in the development and implemen-
   a truly integrated one-stop-shop         integration of the European electricity   9 November 2010. This launch was            tation of BritNed. APX-ENDEX is the
   energy exchange with its electricity     market, through the launch of market      compounded by the late inclusion,           designated exchange, chosen by




                                                                                                                                                                                Managing Directors’ report
   and natural gas products on the spot     coupling in Central West Europe           at request of regulators and TSOs,          BritNed, to implement and operate
   and derivatives markets. During the      (CWE). This was the successful            of the Interim Tight Volume Coupling        an implicit auction for BritNed, inte-
   year, APX-ENDEX took further steps       completion of a 3-year project            (ITVC), connecting the Nordic region        grating the Great Britain electricity
   towards the integration of the           that started at the signing of a          with the CWE region and eventually          market with the Continental European
   European energy markets through          Memorandum of Understanding               launched simultaneously. The next           markets and therefore connecting
   a merger with Belpex. The exchanges      for this region, based on broad           market integration efforts imple-           it with the liquid and integrated
   first announced their intention to       recognition by the regulators,            mented by APX-ENDEX included                Central West European and Nordic
   merge in April 2010 and the inte-        industry representatives, exchanges       the market coupling on NorNed,              electricity market, together with

                                                                                                                                                                           18
IV           Kop                                               Intro




 UK creating one of the biggest               3. APX-ENDEX Market                     The volume of the Power NL spot        indication on steady interest in
 integrated markets in the world.             Developments                            market continued its steady growth     the market.
                                              APX-ENDEX experienced yet another       as the total volume of the market
 The late inclusion of ITVC compound-         year of growing volumes and             (Day-Ahead, Intraday and Strips        The Dutch power futures market
 ing with CWE market coupling with            memberships. The total volume           markets) experienced a 15% increase    experienced slightly declining
 externally driven deadlines for delivery     of the exchange went up by 15%,         year-on-year with a total volume       volumes from the previous year with
 led to a large shift in company priorities   reaching an all time high of 475 TWh.   of 34 TWh. The Day-Ahead auction,      a total of 25 TWh being traded on
 in early 2010, having its knock on           Futures markets recorded a total of     now coupled with the Central West      the exchange and 42 TWh being
 effect for other system-related efforts      281 TWh while spot markets had a        European electricity markets, saw      registered for clearing via the OTC
 that had to be delayed. The vast             total volume of 195 TWh. The number     the total volumes reach 33 TWh         clearing service. The memberships
 number of market coupling projects           of memberships, including the           during the year and the volume         on the Power NL futures market
 being implemented has also increased         Belpex memberships, totalled 396,       growth was obvious by the numerous     remained steady with four new
 the complexity of the organisation           up from 328 in the previous year.       daily records achieved. The daily      members joining the market while
 and its operational procedures and                                                   volume record of 122,036 MWh           four members terminated their
 has resulted in a change of IT system        3.1. Continental Power Markets          was traded on 29 June 2010 for the     membership, with the total number




                                                                                                                                                                         Managing Directors’ report
 landscape. The further embedding             The continental power markets           delivery on 30 June 2010. The number   of memberships standing at 41.
 of these systems into the existing or-       recorded a total volume of 123 TWh.     of memberships remained steady
 ganisation remains a high priority and       The Dutch spot power market experi-     from the previous years, with three    Belpex, the Belgian Power Exchange
 will be addressed in 2011 by means           enced growth while the volumes on       members terminating their member-      established in 2005, saw record high
 of a number of internal projects.            the futures market went down from       ship while two new members joined      volumes on its Day-Ahead and
                                              the previous year. Volumes on the       the platform and the total number      Intraday markets in 2010 when a
                                              Belgian power spot and futures          of memberships reaching 56 by          total of 12 TWh was traded, up by
                                              markets exceeded last year’s volumes.   the end of the year, providing an      17% from the previous year.

                                                                                                                                                                    19
December saw an all time high          ket, with the total number of          3.2 Continental Gas Markets             record was traded on 1 October
monthly volume with 1.6 TWh traded     memberships reaching 28.               The continental gas markets TTF         when the total volume of the day
and the daily record was reached on                                           Gas futures, Gas NL (TTF) spot and      reached 174,000 MWh. September
7 December when 80,607 MWh was         The Central West European elec-        Gas ZEE experienced significant         saw the highest ever monthly volume
traded for delivery on Wednesday       tricity market coupling went live      growth during 2010. The Dutch spot      with a total traded volume of 1.4 TWh.
8 December. The total number of        in November 2010, connecting           and futures gas markets, traded         The increased liquidity on the market
memberships on the Belpex markets      the Dutch and Belgian electricity      on the Title Transfer Facility (TTF),   can be contributed to the improved
grew from the previous year with two   markets with the markets of France,    and Gas ZEE, traded on the Belgian      EuroLight-Trayport interface set-ups
new members joining the market,        Luxembourg and Germany.                Zeebrugge hub, reached a total          as well as the two market makers
leaving memberships now at 36.         Further market integration is          volume of 210 TWh. The volumes          joining the Gas NL (TTF) market
                                       reached through the Interim Tight      traded on the TTF market witnessed      during the year. Additionally four
The Belgian power futures market       Volume Coupling, which connects        a total growth of 130%, demonstrating   new members joined the market,
continued its steady growth with       the Nordic region with the CWE         the importance of the TTF gas           bringing the number of member-
the 2010 volumes exceeding the         region. The market coupling            hub and making it the benchmark         ships up to 26. The spot gas market
previous year’s volumes by 10% and     method aims at more efficient use      for gas in Continental Europe.          in Zeebrugge also experienced




                                                                                                                                                                    Managing Directors’ report
reaching a total of 10 TWh, of which   of available cross-border capacities                                           growth during 2010. The total traded
9 TWh was traded on the exchange       and further price harmonisation        The Gas NL (TTF) spot market saw        volumes reached 0.2 TWh, up by 22%
and 1 TWh was registered for clear-    across the regions. During the first   record high volumes during the year     from 2009. The number of member-
ing via the OTC clearing service.      two months of the market coupling      as an all time record of 6 TWh was      ships went up with two new members
The number of memberships fol-         the entire coupling region had a       traded on the exchange, exceeding       joining the market, leaving the total
lowed the growth trend with five       full price convergence of approxi-     the previous year’s volume by 230%.     number of memberships now
new members joining the market         mately 53% of the time.                The market achieved a number of         standing at 16.
and two members leaving the mar-                                              records during the year: the daily

                                                                                                                                                               20
The most spectacular growth came        growing importance of the TTF hub,       volumes on the spot and prompt            new members joining the market
from the TTF Gas futures market in      APX-ENDEX launched a number of           markets exceeded previous year’s          during the year and the total number
2010. The market reached its highest    initiatives and market improve-          volumes by recording a total of           of memberships reaching 61 at the
volume since the launch of the TTF      ments during the year. In April, the     12 TWh. The spot market, reaching         end of the year.
Gas futures products with a total       fees for exchange-traded TTF Gas         10 TWh during 2010, especially
of 204 TWh, up by 130% from 2009,       futures were reduced. The trading        experienced a number of records           The Power UK market saw a number
of which the exchange traded            hours of the TTF Gas futures were        during the year with the December         of market initiatives implemented
contracts recorded 119 TWh while        extended in May by moving the            volume reaching an all time high of       during the year, making it a more
85 TWh was registered for clearing      closing time from 5:30pm to 6pm          1.0 TWh traded while the transaction      attractive trading place for market
via the OTC clearing services.          CET (5 GMT) to facilitate TTF trading    day of 28 December saw 45,054 MWh         participants. The APX-ENDEX spot
In November, the market experienced     for London-based traders. In addition,   traded on the day. The prompt             trading system, EuroLight 5.0, was
the highest ever total monthly volume   two season contracts and one             market saw 2.7 TWh traded on              upgraded in February, adding new
with 26 TWh.                            calendar contract were added to          the market, marking a yearly record       trading features which include
The number of memberships saw           the existing product range. These        volume. The APX-ENDEX OTC                 allowing the market participants to
a similar trend in volumes with nine    improvements have greatly contri-        Broker Give-up was down in volume         trade on the Power UK market until




                                                                                                                                                                         Managing Directors’ report
new members joining the market          buted to the increasing liquidity of     in early 2010 but the service recovered   15 minutes before gate closure.
while three members terminated          the APX-ENDEX TTF gas market             through the year, at the end reaching     As the first exchange offering this
their membership, bringing the t        as a real winner in 2010, both with      a total of 80 GWh. The liquidity on       service in Europe, APX-ENDEX is
otal number of memberships to 46,       its absolute growth and when com-        the Power UK markets is expected          also the only exchange facilitating
up from 40 in 2009.                     pared with other exchanges.              to increase with the BritNed cable        trading so close to physical delivery,
                                                                                 becoming operational in April 2011.       allowing traders to analyse the latest
As a result of increased liquidity      3.3. UK Power Market                     The number of memberships has re-         information this close to delivery.
on the TTF Gas markets and the          On the Power UK market the traded        covered after last year’s dip with six

                                                                                                                                                                    21
The new version also gives members        the previous year’s record high         3.5. Bio-Energy: Wood Pellets           4. Third Party Services
possibilities such as iceberg             volumes by reaching a total of          APX-ENDEX has published reference
functionality, and is operational         13 TWh. The On-the-Day Commod-          prices for Industrial Wood Pellet       4.1. Spot Carbon Contracts
for the coupling of the UK with the       ity Market (OCM) remains the most       products since 2008. The index has      APX-ENDEX has provided services
Central West European market              liquid of the APX-ENDEX UK markets      provided the market with a valuable     for Climex, the Netherlands-based
across the BritNed cable. Finally,        and nearly all of the traded volume     tool to increase much needed trans-     European emissions exchange,
APX-ENDEX introduced Light                was seen on the OCM market in           parency. As a result, the index has     since 2006. APX-ENDEX clears and
Membership in October and became          2010, as in the previous years.         evolved and the number of pricing       physically settles transactions
the first exchange to provide such a      Despite the decrease in the             panel members expanded to 15 in         traded on the Climex trading
product on the UK market. The smaller     volumes compared to 2009, the           2010. (2009 : 13)                       platform. Climex is an international,
industrial and commercial market          volume on the OCM market in 2010        Currently, reference prices for three   fully electronic trading platform
players can directly access the UK        was still significantly above that of   front month contracts, three front      for dealing in Carbon allowances.
electricity wholesale market by trading   2008. The OCM market recorded           quarter contract and three front        It provides a marketplace where
through an existing exchange member.      a volume of 130 TWh while NBP           calendar contracts are being pub-       trading parties can be contacted
As with full memberships, APX-ENDEX       outperformed last year by reaching      lished. The reference prices for        easily and where trading in a fast,




                                                                                                                                                                       Managing Directors’ report
is responsible for the clearing and       96 GWh and Gas Storage markets          the Industrial Wood Pellets are         simple, cost effective and reliable
settlement of all transactions and        saw a total of 393 GWh. Despite         updated weekly.                         manner is possible. Due to the
acts as a central counterparty.           the decreasing volumes the Gas UK       During the year, APX-ENDEX              number of fraud incidents on this
                                          market saw a record number of           together with the Port of Rotterdam     market, APX-ENDEX and Climex
3.4. UK Gas Market                        79 memberships with nine new            took the initial steps towards estab-   jointly terminated the trading and
On its 11th year of operation, the        members joining the market this         lishing the world’s first wood pellet   clearing activities on this market
Gas UK markets experienced a              year, proving the continuous            exchange, due to be operational         on 1 March 2011.
slight decrease on volumes from           interest in the market.                 in 2011.

                                                                                                                                                                  22
5. Human Resources                     departmental portfolio on company        6. Regulation
2010 was an extremely busy year for    policy and local differences in legis-   APX-ENDEX operates in a complex
APX-ENDEX with major projects to       lation to uphold values of consistency   regulatory environment characterised
be delivered under tight deadlines,    and transparency across the group        by different jurisdictions, a variety
requiring key functions and            as well as meeting business require-     of government bodies and energy
disciplines to multi-task. HR played   ments for continuity.                    as well as financial regulators.
an important role in supporting
the business with recruitment of       Preparations were also made for          In the Netherlands, the Dutch
qualified (interim) staff to ensure    the Belpex merger to provide a           Electricity Act 1998 (Elektriciteits-     if the shoe fits,
continuity and managing an effec-      platform for the integration of staff    wet 1998) and Gas Act (Gaswet)          you’re not allowing
tive and controlled in- and out-flow   and policy in 2011.                      ensure the existence of a power
                                                                                                                            for growth.
of staff. In a culture of change,                                               and gas exchange. Based on the
employee turnover and work pressure,   Internal focus was largely, in close     Gas Act, APX-ENDEX has been                Robert N. Coons
it was important for HR to provide     co-operation with finance, on the        appointed as Gas Exchange
support to line managers with          implementation of a new payroll          Operator by the Dutch Minister of




                                                                                                                                                   Managing Directors’ report
regard to headcount allocation,        system for the group, including          Economic Affairs, Agriculture and
continuity and motivated high          bringing UK payroll in-house.            Innovation. Based on the Electricity
performance.                           Group in-house training needs            Act 1998, APX-ENDEX has been
                                       were addressed with regard to            appointed as Electricity Exchange
Restructuring and changes in senior    professionalising the development        operator by the Minister of Economic
management brought the need for        of skills and competencies in a          Affairs, Agriculture and Innovation
HR to educate and coach managers       number of areas including project        as well.
new to the company or with a new       management.                               

                                                                                                                                              23
The Dutch Office of Energy regula-    by the Transmission System Operator      party services. The fixed fees consist   Interest income from collateral is
tion, Energiekamer, is charged with   National Grid Gas PLC as the operator    of membership- and entrance fees,        the interest received on the cash
regulating the Electricity Act 1998   of the On-the-Day Commodity Market       whereas the variable fees contain        collateral provided to APX-ENDEX
and Gas Act. This regulatory body     (OCM). APX Commodities Ltd. is           transaction-, clearing & settlement      in relation to clearing services. In
operates as a chamber within the      regulated by the Financial Services      fees and service income. In 2010,        2010, APX-ENDEX revised its income
Netherlands Competition Authority     Authority (FSA). Throughout 2009,        the company increased both its           model for interest on collateral,
(NMa). Due to these appointments,     APX Commodities Ltd. continued           member base and cleared volumes,         resulting in much more competitive
APX-ENDEX is supervised by the        to conduct regulated business in         resulting in an increase of EUR          interest reimbursements for our
Energiekamer and the Ministry         respect of its APX Gas UK and            3.4 million in total fee revenues as     members. This initiative led to a
of Economic Affairs, Agriculture      APX Power UK markets in the capacity     compared to 2009, resulting in a         further reduction in income from
and Innovation.                       of Multilateral Trading Facility (MTF)   total of EUR 24 million. The increase    collateral in 2010 on top of the
                                      operator. The scope of regulatory        of revenue includes the effect of        already absorbed loss of income
APX-ENDEX Derivatives B.V. is a       permission of APX Commodities            the full consolidation of Belpex S.A.    due to the prevailingly low market
regulated securities exchange         Ltd. includes – besides operating        in the financial statements since        interest rates since 2009.
recognised by the Dutch Minister      a multilateral trading facility –        13 October 2010.




                                                                                                                                                                     Managing Directors’ report
of Finance and is supervised by       dealing in, and arranging deals in,                                               7.2. Expenses
the Netherlands Authority for the     derivative instruments.                  APX-ENDEX generates additional           The 2010 increase of expenses com-
Financial Markets (AFM) and the                                                revenues from the provision of           pared to 2009 includes the effect of
Dutch Central Bank (DNB).             7. Financial Results                     business development services            the full consolidation of Belpex S.A.
                                                                               to other exchanges and TSOs.             in the financial statements since
In the UK, APX Commodities Ltd.       7.1. Revenue and other income            Total revenues generated from            13 October 2010. The remainder of
is designated by the UK energy        Revenue of APX-ENDEX consists of         third party services in 2010 amount      the increase in costs is explained by
regulator Ofgem and appointed         fixed fees, variable fees and third      to EUR 4.4 million.                      the hiring of additional personnel

                                                                                                                                                                24
to enable the company to absorb         reserves by an equal amount. The           result in a continuous evaluation           offices and the development of
the additional workload from the        dividend was paid out in cash.             of the company’s product offering           further product enhancements.
various market coupling initiatives.                                               and positioning within the market.
Foreign exchange gains in 2010 on       Throughout 2010, APX-ENDEX                 By doing so, management is confi-           7.5. Risk management and the use of
balances of excess cash held in         capitalised an amount of EUR 1             dent that it can retain its current         derivative financial instruments
Pound Sterling have been reported       million for investments made in IT         customer base and provide stable            The risk management practices
under financial income and expenses.    hardware and intangible assets.            levels of market liquidity.                 and the use of derivative financial
                                                                                                                               instruments are extensively
7.3. Investments and financing          7.4. Outlook                               Our ambition to operate as one of           disclosed in the notes to the
In 2010, APX-ENDEX completed the        In line with the Outlook given for 2009,   the leading and most competitive            financial statements.
acquisition of the remaining 90%        management is facing an increasing         energy exchanges within Europe
of the outstanding shares of Belpex     momentum for the consolidation of          will result in the need to reconsider
S.A., the Belgian power exchange,       energy exchanges in Europe.                existing cost- and financing structures
for EUR 17 million. APX-ENDEX           The completed acquisition of               without impairing the quality of
now owns 100% of the outstanding        Belpex and APX-ENDEX’s continuous          our existing product portfolio or




                                                                                                                                                                          Managing Directors’ report
shares in Belpex S.A. The acquisition   involvement in market coupling             hampering innovative developments.
was financed by an external short-      projects throughout Europe result
term loan and the issue of 260,506      in a strong positioning of the group       In 2011, APX-ENDEX will commit a
new ordinary shares to Elia System      amongst its peers.                         significant amount of funds to a
Operator S.A.                                                                      number of projects improving the
                                        The strategic landscape and increased      company’s current IT infrastructure.
APX-ENDEX distributed a dividend        competition in a number of                 In addition, investments will be made
of EUR 20 million, lowering its         APX-ENDEX’s core markets will              to facilitate the relocation of the Dutch

                                                                                                                                                                     25
Financial Statements
27




     Financial Statements
Consolidated balance sheet as at 31 December 2010
before profit appropriation
(EUR ’000)


Assets                                                  ref.     31 December 2010               31 December 2009
Non-current assets
Intangible assets                                         5     40,024                         23,259
Property, plant and equipment                             6      1,295                           647
Financial assets at fair value through profit or loss     7          -                          1,900
Deferred income tax assets                                8       428                            882
                                                                                     41,747                         26,688


Current assets
Trade debtors                                             9      5,839                          1,381
Debtors relating to energy transactions                   9    186,170                        124,602
Other receivables                                        10     4,006                           4,488
Derivative financial instruments                         11        25                             40
Prepayments and accrued income                                   3,671                          2,977
Short-term bank deposits                                 12          -                        127,000
Carbon certificates held as collateral                   14     37,851                          9,066
Collateral in cash                                       13    643,943                        392,453
Cash and cash equivalents                                       17,217                         10,761
                                                                                    898,722                        672,768


Total assets                                                                        940,469                        699,456




                                                                                                                                  Financial Statements
                                                                                                                             28
Liabilities                                 ref.     31 December 2010               31 December 2009
Eauity
Share capital                                        1,302                          1,042
Share premium                                       20,641                         19,802
Foreign currency reserve                            3,560 –                         3,897 –
Retained earnings                                   13,188                          8,936
Unappropriated result                               3,004                           4,252
Non-controlling interests                                -                              -
Total equity                                 15                          34,575                         30,135


Non-current liabilities
Deferred income tax liabilities              16      6,674                          3,961
                                                                          6,674                          3,961


Current liabilities
Trade creditors                                      1,097                           999
Creditors relating to energy transactions    17    184,676                        123,915
Income tax payable                                       -                           276
Other liabilities                            18     12,774                          1,513
Derivative financial instruments             11        25                             40
Accruals and deferred income                         2,996                          2,088
Borrowings                                   19     15,858                        135,010
Liabilities from carbon collateral                  37,851                          9,066
Liabilities from collateral                  13    643,943                        392,453




                                                                                                                      Financial Statements
                                                                        899,220                        665,360


Total liabilities                                                       940,469                        699,456




                                                                                                                 29
Consolidated profit and loss account 2010
(EUR ’000)


                                            ref.             2010              2009
Revenues                                     20             30,128            26,353
Other income                                 21                  -             2,410


operating expenses
Personnel expenses                           22    11,617            11,322
Amortisation and depreciation                5,6   2,304             2,220
Other operating expenses                     23    12,421            10,513
                                                            26,342            24,055


operating result                                            3,786             4,708


Financial income and expenses
Financial income                             24    2,291             6,772
Financial expenses                           24    2,246             6,381
                                                               45               391


result before taxation                                      3,831             5,099


Income tax                                   25               827               847


Net income                                                  3,004             4,252


Attributable to:




                                                                                            Financial Statements
Equity holders of the company                               3,004              4,252
Non-controlling interests                                        -                 -
                                                            3,004             4,252




                                                                                       30
Consolidated statement of comprehensive income 2010
(EUR ’000)


                                                         ref.   2010    2009
Profit for the year                                       15    3,004   4,252


other comprehensive income:
Currency translation differences                                 337     929


Total comprehensive income for the year                         3,341   5,181


Items in the statement above are disclosed net of tax.




                                                                                     Financial Statements
                                                                                31
Consolidated statement of changes in equity 2010
(EUR ’000)


                                                                      Attributable to the equity holders of the company
                                           Share            Share                  Foreign           retained             Unappro-
                                          capital        premium           currency reserve          earnings         priated result    Total 2009
Balance as at 1 January                    1,042           19,802                     4,826 –            8,925                4,911        29,854


Result of the year                              -               -                          -                 -                4,252         4,252
Exchange rate differences                       -               -                       929                  -                     -          929
Total comprehensive income                      -               -                       929                   -               4,252         5,181


Appropriation profit 2008                       -               -                          -                11                   11 –            -
Dividend                                        -               -                          -                 -                4,900 –       4,900 –


Balance as at 31 December                  1,042           19,802                     3,897 –            8,936                4,252        30,135



                                                                      Attributable to the equity holders of the company
                                           Share            Share                  Foreign           retained             Unappro-
                                          capital        premium           currency reserve          earnings         priated result    Total 2010
Balance as at 1 January                    1,042           19,802                     3,897 –            8,936                4,252        30,135


Result of the year                              -               -                          -                 -                3,004         3,004
Exchange rate differences                       -               -                       337                  -                     -          337
Total comprehensive income                      -               -                       337                   -               3,004         3,341


Appropriation profit 2009                       -               -                          -             4,252                4,252 –            -
Dividend                                        -          20,000 –                        -                 -                     -       20,000 –
Share issue                                  260           20,839                          -                 -                     -       21,099




                                                                                                                                                           Financial Statements
Balance as at 31 December                  1,302           20,641                     3,560 –           13,188                3,004        34,575


The foreign currency reserve is a non-distributable reserve.




                                                                                                                                                      32
Consolidated cash flow statement 2010
(EUR ’000)


                                                    ref.                     2010                        2009
Cash flow from clearing activities                   28
Power purchases                                            2,489,641                   1,670,373
Gas purchases                                              2,322,696                   1,586,260
Carbon purchases                                            173,508                     977,262
                                                                         4,985,845                   4,233,895
Power sales                                                2,489,641 –                 1,670,373 –
Gas sales                                                  2,322,696 –                 1,586,260 –
Carbon sales                                                173,508 –                    977,262 –
                                                                         4,985,845 –                 4,233,895 –
                                                                                 -                            -
Cash flow from operating activities
Cash generated from operations                       29       14,744                        581
Income tax paid                                                2,748 –                      920 –
Interest received                                    24        2,157                       6,772
Interest paid                                        24        2,246 –                     6,381 –
                                                                            11,907                         52
Cash flow from investment activities
Investments in intangible assets                      5         223 –                       162 –
Investments in subsidiairies net of cash acquired    30       13,379 –                         -
Investments in property, plant and equipment          6        1,073 –                      488 –
                                                                            14,675 –                      650 –
Cash flow from financing activities
Addition to equity by shareholders                   15      21,099                            -
Borrowings                                                     7,848                       1,210
Fixed term deposits maturing                                       -                       6,150
Dividend paid                                        15      20,000 –                      7,400 –
                                                                             8,947                         40 –




                                                                                                                        Financial Statements
Exchange rate differences on cash                                             277                         728


Cash flow                                                                   6,456                          90
Net cash and cash equivalents 1 January                                    10,761                      10,671
Net cash and cash equivalents at 31 December                               17,217                      10,761



                                                                                                                   33
Notes to the consolidated financial statements


1. General notes                                                                    After delivery, a debtor and creditor position exist to reflect the unsettled con-
APX-ENDEX is an independent, fully electronic exchange that provides                tract. At settlement date, debtor positions are collected first and then creditor
anonymous trade on the electricity and gas markets. Trades are being offered        positions are paid. Debtor and creditor positions are not always equal, because
on the spot and derivatives market for both electricity and gas. APX-ENDEX          of the time gap between the collection of debtors and payment of creditors.
has two main activities: operating or servicing energy exchanges and clearing
services for contracts that arise on these exchanges. APX-ENDEX’s business          APX-ENDEX has a system of security measures in place to cover the market
focus is on products with physical delivery, within-day, day-ahead or longer-       risk on undelivered positions and to assure the recovery of the debtor posi-
dated products. APX-ENDEX provides producers, distributors, industrial              tions. The security measures consist of cash and cash equivalents and bank
groups, traders and brokers with standardised products to sell and purchase         guarantees. APX-ENDEX operates two types of cash collateral accounts:
energy. By offering central counter party clearing in all transactions, anonymity   escrow and ‘in name of’ accounts. Escrow accounts were introduced in 2010
for members is retained.                                                            and are legally owned by the member who is therefore bearing the majority
                                                                                    of the risks and rewards relating to these accounts (e.g. interest). As a result,
APX-ENDEX is a trading name for APX-ENDEX Holding B.V. and its subsidiaries.        the amounts held in Escrow accounts are not recognised on the balance
APX-ENDEX Holding B.V. is a limited liability company incorporated and              sheet of APX-ENDEX. The cash and cash equivalent placed in ‘in name of’
domiciled in the Netherlands. The address of its registered office is               accounts with APX-ENDEX as security and the related liability are shown
Strawinskylaan 729, 1077 XX in Amsterdam.                                           separately on the face of the balance sheet.


APX-ENDEX acts as counterparty in the trades on the exchanges it operates or        The shares of APX-ENDEX Holding B.V. are owned for 56.05% by TenneT
services, with exception of the longer-dated products provided by APX-ENDEX         Holding B.V., for 20.88% by N.V. Nederlandse Gasunie, for 20% by Elia Sys-
Derivatives B.V., which has outsourced all clearing activities to ECC A.G.          tem Operator S.A. and for 3.07% by Fluxys S.A. The financial statements are
                                                                                    also part of the consolidated annual accounts for TenneT Holding B.V.
Before delivery, the existing contracts are accounted for as derivative financial
instruments, which have a market value of zero at contract date. With time,         These consolidated financial statements have been prepared and signed by




                                                                                                                                                                              Financial Statements
the market price may change. If the market price differs from the contract          the Executive Board and recommended for approval in the Supervisory
price, the derivative value becomes positive or negative accordingly. The           Board meeting on 23 March 2011. These statements are expected to be ap-
value of the derivatives arising from undelivered positions is shown separately     proved for issue by the General Meeting of Shareholders on 6 April 2011.
on the face of the balance sheet. Since APX-ENDEX is counterparty to both
sides of the trade, the net position for APX-ENDEX is always zero.



                                                                                                                                                                         34
    2. Significant accounting policies                                                 date is on or after the beginning of the first annual reporting period
The principal accounting policies applied in the preparation of these con-             beginning on or after 1 July 2009. These amendments have been applied
solidated financial statements are set out below. These policies have been             to the acquisition of Belpex S.A. on 13 October 2010.
consistently applied to all the years presented, unless otherwise stated.          •   IAS 1 (amendment), ‘Presentation of financial statements’. The amendment
                                                                                       clarifies that the potential settlement of a liability by the issue of equity
2.1. Basis of preparation                                                              is not relevant to its classification as current or non-current. By amending
The group financial statements have been prepared in accordance with the               the definition of current liability, the amendment permits a liability to be
International Accounting Standards and International Financial Reporting               classified as non-current (provided that the entity has an unconditional right
Standards as endorsed by the European Union (“IFRS”). The principles of                to defer settlement by transfer of cash or other assets for at least 12 months
valuation are based on a historical cost basis, with the exception of derivative       after the accounting period) notwithstanding the fact that the entity could
financial instruments and financial assets. Accounting policies have been              be required by the counterparty to settle in shares at any time. This amend-
applied consistently unless indicated otherwise. The financial statements are          ment is considered for the classification of the group’s liabilities.
presented in Euros and all values are rounded off to the nearest EUR 1,000         •   IAS 36 (amendment), ‘Impairment of assets’, effective 1 January 2010.
except where otherwise indicated.                                                      The amendment clarifies that the largest cash-generating unit (or group of
                                                                                       units) to which goodwill should be allocated for the purposes of impairment
The preparation of financial statements in conformity with IFRS requires the           testing is an operating segment, as defined by paragraph 5 of IFRS 8, ‘
use of certain critical accounting estimates. It also requires management to           Operating segments’ (that is, before the aggregation of segments with
exercise its judgement in the process of applying the group’s accounting               similar economic characteristics). This amendment does not affect the
policies. The areas involving a higher degree of judgement or complexity,              company since it is not required to disclose information on segments.
or areas where assumptions and estimates are significant to the consolidated       •   amendments to IAS 7 ‘Statement of cashflows’ – The guidance has been
financial statements are disclosed in note 4.                                          amended to clarify that only expenditure that results in a recognised asset
                                                                                       in the balance sheet can be classified as a cash flow from investing activities.
New and amended standards adopted by the group                                         The cash flow statements (consolidated and stand alone) included in this
A number of new and amended IFRSs have been adopted by the group, if                   annual report reflect this amendment.
that particular IFRS is applicable to the group’s financial statements. New        •   amendments to IAS 17 ‘Leases’ – The amendments concern changes
or amended IFRSs not listed below are not relevant to the group’s financial            with regards to combined leases of land and buildings, classification
statements.                                                                            ofland leases with an indefinite useful life and retrospective classification




                                                                                                                                                                               Financial Statements
                                                                                       of financial leases. These amendments do not affect any of the company’s
•     IFRS 3 (revised), ‘Business combinations’, and consequential amendments          existing lease contracts.
      to IAS 27, ‘Consolidated and separate financial statements’, IAS 28,         •   amendments to IAS 18 ‘Revenue’ – Additional guidance has been issued
     ‘Investments in associates’, and IAS 31, ‘Interests in joint ventures’, are       on principal and agent classifications. This has no effect on the company’s
      effective prospectively to business combinations for which the acquisition       financial statements.



                                                                                                                                                                          35
•   amendments to IAS 38 ‘intangible assets’ – amendments on the recog-             The following entity is dormant and is not included in the consolidated
    nition and valuation of intangible assets acquired in a business combina-       financial statements:
    tion. These amendments have been adopted for the purchase price                 •   APX Power Ltd., London, UK (100%)
    allocation of the acquisition of Belpex S.A. on 13 October 2010.                The Equity of APX Power Ltd. was reduced to EUR 1 and all assets and
•   amendments to IAS 39 ‘Financial Instruments: Recognition & Measure-             liabilities have been settled.
    ment’ – amendments related to the recognition and measurement of
    forward contracts and hedges. None of these                                     In 2010 the group conducted a restructuring of its legal entities (see above)
    are applicable to the company.                                                  to achieve a better alignment with the group’s activities. APX-ENDEX Holding
                                                                                    B.V. (formerly APX B.V.) is now solely providing holding services to the rest
2.2. Basis of consolidation                                                         of the group. All trading and clearing activities executed by the APX B.V.
Subsidiaries are all entities over which APX-ENDEX Holding B.V. has the power       have now been segregated into a separate trading (APX-ENDEX Power B.V.)
to govern the financial and operating policies. Assets, liabilities and income of   and clearing (APX-ENDEX Clearing B.V.) entity respectively. Furthermore,
all subsidiaries are fully included in the consolidated financial statements. On    all continental Gas activities (TTF, Zeebrugge) were combined by merging
4 October 2010, APX-ENDEX completed a legal restructuring resulting in a number     APX Gas Zeebrugge B.V. and APX Gas NL B.V. into a combined entity
of new entities and name changes of existing companies. The restructuring was       APX-ENDEX Gas B.V. Subsequently, the gas clearing activities for the Dutch
executed on 4 October 2010 but became legally effective retrospectively on          TFF, and Belgian Zeebrugge hub were split off to the clearing entity as well.
1 January 2010. The consolidated financial statements comprise of the financial     The restructuring became legally effective retrospectively on 1 January 2010
information from the following subsidiaries:                                        and is reflected accordingly in the consolidated financial statements.
•   APX-ENDEX Holding B.V., Amsterdam, the Netherlands (100%)                       The restructuring did not have a financial effect on the consolidated financial
    - Named APX B.V. before 4 October 2010                                          statements. The stand alone financial statements of APX-ENDEX Holding B.V.
•   APX-ENDEX Power B.V., Amsterdam, the Netherlands (100%)                         will be affected due to the split off of its trading and clearing activities in
    - incorporated 3 October 2010                                                   separate entities. This is reflected in the large variations when comparing
•   APX-ENDEX Gas B.V., Amsterdam, the Netherlands (100%)                           the 2010 and 2009 financial statements.
    - Named APX Gas Zeebrugge B.V. before 4 October 2010
    - merged with APX Gas NL B.V. on 4 October 2010                                 All material inter-company transactions, balances and unrealised gains/losses
•   APX-ENDEX Derivatives B.V., Amsterdam, the Netherlands (100%)                   on transactions between group companies are eliminated. Accounting policies
    - Named European Energy Derivatives Exchange N.V. before 4 October 2010         of subsidiaries have been changed where necessary to ensure consistency
    APX-ENDEX Clearing B.V., Amsterdam, the Netherlands (100%)




                                                                                                                                                                           Financial Statements
•                                                                                   with the policies adopted by the group.
    - incorporated 3 October 2010
•   APX Commodities Ltd., Nottingham, UK (100%)                                     2.3. Foreign currencies
•   Belpex S.A., Brussels, Belgium (100%)                                           The Euro (EUR) is the functional currency of the parent company and the presen-
    - Acquired 13 October 2010                                                      tation currency of the group. All subsidiaries, except APX Commodities Ltd.,



                                                                                                                                                                      36
have the Euro as functional currency. APX Commodities Ltd. has Pound Sterling        Principles of valuation of assets and liabilities
(GBP) as functional currency. The value of GBP denominated assets and liabi-         2.4. Intangible assets
lities of foreign subsidiaries included in the consolidation, have been translated
at the exchange rate prevailing at the balance sheet date. The exchange              2.4.1 Goodwill
rate used at 31 December 2010 is 1.161 EUR/GBP (1.126 EUR/GBP at 31                  Goodwill represents the excess of the cost of an acquisition over the fair value
December 2009); income and expenses are recognised at the average rate               of the group’s share of the net identifiable assets of the acquired subsidiary
during the financial year 1.166 EUR/GBP (1.123 EUR/GBP for 2009). The resulting      at the date of acquisition. Goodwill on acquisitions of subsidiaries is included
conversion differences are carried over to the translation reserve within the        in ‘intangible assets’. Goodwill is tested annually for impairment and carried
shareholders’ equity. When a foreign operation is partially disposed of or           at cost less accumulated impairment losses. Impairment losses on goodwill
sold, exchange differences that were recorded in equity are recognised in            are not reversed. Gains and losses on the disposal of an entity include the
the income statement as part of the gain or loss on sale.                            carrying amount of goodwill relating to the entity sold. Goodwill is allocated
                                                                                     to cash-generating units for the purpose of impairment testing. The allocation
Transactions in foreign currency are translated into the functional currency         is made to those cash-generating units or groups of cash-generating units
using the exchange rate at the date of the transaction. Monetary assets and          that are expected to benefit from the business combination in which the
liabilities in foreign currencies and retranslations are translated at the rate      goodwill arose, identified according to operating segment.
of the balance sheet date. Gains and losses resulting from transactions in           The value of the goodwill denominated in the functional currency (GBP) of
foreign currency are recognised in the income statement.                             the Cash Generating Unit (CGU) it relates to, is converted annually against
                                                                                     the foreign exchange (FX) rate on the balance sheet date. The FX differences
                                                                                     between GBP and EUR are charged to equity.


                                                                                     2.4.2 Contractual Customer relationships
                                                                                     Contractual customer relationships acquired in a business combination
                                                                                     are recognised at fair value at the acquisition date. The contractual customer
                                                                                     relations have a finite useful life and are carried at cost less accumulated
                                                                                     amortisation. Amortisation is calculated using the straight-line method over
                                                                                     the expected life of the customer relationship.




                                                                                                                                                                             Financial Statements
                                                                                     2.4.3 Technical Infrastructure
                                                                                     Technical infrastructure (trading platform) is valued at acquisition cost or
                                                                                     production cost and amortised on a straight-line basis over the estimated
                                                                                     useful life of three years. Impairment of intangible assets at the balance
                                                                                     sheet date is taken into account.



                                                                                                                                                                        37
2.5. Property, plant and equipment                                                    Financial assets at fair value through profit or loss
Property, plant and equipment are stated at acquisition cost including directly       Financial assets at fair value through profit or loss are financial assets designated
attributable expenses, less accumulated depreciation and any impairment               to the category on initial recognition. A financial asset is classified in this category
in value. Depreciation is calculated on a straight-line basis, less residual value,   if acquired principally for the purpose of selling in the short term. Derivatives are
over the estimated useful life. The estimated useful life for hardware and fixtures   classified as held for trading. Assets in this category are classified as current assets.
and fittings is three years. The carrying values of property, plant and equipment
are reviewed for impairment whenever events or changes in circumstances               Loans and receivables
require. Given the nature of the property, plant and equipment, costs of              Loans and receivables are non-derivative financial assets with fixed or deter-
maintenance are expensed as incurred.                                                 minable payments that are not quoted in an active market. They are included
                                                                                      in current assets, except for maturities greater than 12 months after the balance
Annually, the residual values and useful lives of plant, property and equipment       sheet date. These are classified as non-current assets. Loans and receivables
are reviewed and changed if required.                                                 are classified as trade and other receivables in the balance sheet.


2.6. Impairment of non-financial assets                                               Regular purchases and sales of financial assets are recognised on the trade-
Assets that have an indefinite useful life – for example, goodwill or intangible      date – the date on which APX-ENDEX commits to purchase or sell the asset.
assets not ready to use – are not subject to amortisation and are tested annually     Financial assets at fair value through profit or loss are initially recognised
for impairment. Assets that are subject to amortisation are reviewed for              at fair value, and transaction costs are expensed in the income statement.
impairment whenever events or changes in circumstances indicate that the              Financial assets are derecognised when the rights to receive cash flows from
carrying amount may not be recoverable. An impairment loss is recognised              the investments have expired or have been transferred and APX-ENDEX
for the amount by which the asset’s carrying amount exceeds its recoverable           has transferred substantially all risks and rewards of ownership. Loans and
amount. The recoverable amount is the higher of an asset’s fair value less            receivables are carried at amortised cost using the effective interest method.
costs to sell and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately identifi-      Gains or losses arising from changes in the fair value of the ‘financial assets at
able cash flows (cash-generating units). Non-financial assets other than goodwill     fair value through profit or loss’ category are presented in the income state-
that suffered an impairment are reviewed for possible reversal of the impairment      ment within other (losses)/gains – net, in the period in which they arise.
at each reporting date.
                                                                                      If the market for a financial asset is not active (and for unlisted securities),




                                                                                                                                                                                       Financial Statements
2.7. Financial assets                                                                 APX-ENDEX establishes fair value by using valuation techniques. These include
Financial assets are classified in the following categories: at fair value through    the use of recent arm’s length transactions, reference to other instruments
profit or loss and loans and receivables. The classification depends on the           that are substantially the same, discounted cash flow analysis and option pricing
purpose for which the financial assets were acquired. Management determines           models, making maximum use of market inputs and relying as little as possible
the classification of its financial assets at initial recognition.                    on entity-specific inputs.



                                                                                                                                                                                  38
APX-ENDEX assesses at each balance sheet date whether there is objective             value of zero at contract date. With time, the market price may change.
evidence that a financial asset or a group of financial assets is impaired.          If the market price differs from the contract price, the derivative value becomes
Impairment losses recognised in the income statement on equity instruments           positive or negative. The value of the derivatives arising from undelivered posi-
are not reversed through the income statement.                                       tions is shown separately on the face of the balance sheet. Since APX-ENDEX
                                                                                     is counterparty to both sides of the trade, the net position for APX-ENDEX is
2.8. Deferred income taxes                                                           always zero. Fair value amounts are calculated using observable market prices.
Deferred income tax is determined, using the balance sheet liability method,
providing for temporary differences between the carrying amounts of assets           Derivatives are recognised at fair value on the date the contract is entered
and liabilities for financial reporting purposes and taxation purposes. The amount   into and subsequently re-measured at fair value. Changes in fair value are
of deferred tax provided is based on the expected realisation or settlement          recognised in the income statement. Due to the fact that APX-ENDEX functions
of the carrying amount of assets and liabilities, using tax rates enacted or         as central counterparty and takes no positions itself, impact on the income
substantially enacted at the balance sheet date.                                     statement is expected to be zero. Hedge accounting has not been applied.
                                                                                     Derivative financial instruments can be assets as well as liabilities.
Deferred tax liabilities for temporary differences associated with investments in
subsidiaries, branches and associates, and interests in joint ventures, are recog-   2.10. Accounts receivable
nised except to the extent that both of the following conditions are satisfied:      Accounts receivable are initially recognised at their fair value and subsequently
a) the parent, investor or venturer is able to control the timing of the             measured at amortised cost using the effective interest method. A provision
   reversal of the temporary difference; and                                         for impairment of trade receivables is established when there is objective
b) it is probable that the temporary difference will not reverse in the              evidence that APX-ENDEX will not be able to collect all amounts due accord-
   foreseeable future.                                                               ing to the original terms of receivables. Significant debtor financial difficulties,
                                                                                     probability that the debtor will enter bankruptcy or financial reorganisation,
Deferred tax assets for temporary differences arising between the tax base           and default or delinquency in payments are considered indicators that the
of assets and their carrying amounts in the consolidated financial statements        trade receivable is not collectable. The amount of the provision is the
are recognised in full. The tax effects of losses available for carry forward are    difference between the asset’s carrying amount and the present value of
recognised as an asset where it is probable that future taxable profits will be      estimated future cash flows, discounted at the original effective interest rate.
available against which these losses can be utilised.




                                                                                                                                                                                 Financial Statements
2.9. Derivative financial instruments
With the exception of the trades on the exchanges within APX-ENDEX
Derivatives B.V., APX-ENDEX acts as counterparty in the trades on the ex-
changes it operates or services. Before delivery, the existing contracts are
accounted for as derivative financial instruments, which have a market



                                                                                                                                                                            39
2.11. Short-term bank deposits                                                   2.15. Employee benefits
Short-term bank deposits are deposits with an original maturity of three
months or less.                                                                  2.15.1 Pension obligations
                                                                                 Group companies operate various pension schemes. The schemes are
2.12. Collateral in cash                                                         generally funded through payments to insurance companies or trustee-
Collateral in cash is collateral provided to APX-ENDEX by members to cover       administered funds, determined by periodic actuarial calculations. The group
trading margin requirements. This includes cash collateral held in ‘in name      has both defined benefit and defined contribution plans. A defined contribu-
of’ accounts only, but not cash collateral held in escrow accounts. For the      tion plan is a pension plan under which the group pays fixed contributions
cash collateral balances held in the “in name of accounts”, APX-ENDEX has        into a separate entity. The group has no legal or constructive obligations
recognised an offsetting liability to the members.                               to pay further contributions if the fund does not hold sufficient assets to pay
                                                                                 all employees the benefits relating to employee service in the current and
2.13. Cash and cash equivalents                                                  prior periods. A defined benefit plan is a pension plan that is not a defined
Cash and cash equivalents in the balance sheet comprise of cash at bank          contribution plan. Typically defined benefit plans define an amount of
and cash in hand. In the consolidated balance sheet, bank overdrafts are         pension benefit that an employee will receive on retirement, usually dependent
shown within borrowings in current liabilities.                                  on one or more factors such as age, years of service and compensation.


2.14. Provisions                                                                 The defined benefit plans operated within the group qualify as multi-employer
Provisions are recognised when the group has a current obligation (legal or      fund. IAS 19 requires that information such as the assets and liabilities relating
constructive) as a result of a past event, when it is probable that an outflow   the defined benefit scheme is disclosed. Since the multi-employer fund cannot
of resources embodying economic benefits will be required to settle the          provide this type of information on an employer level the pension is treated as
obligation. If the effect of the time value of money on the quantification       a defined contribution scheme.
of the provision is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market        For defined contribution plans, the group pays contributions to publicly or
assessments of the time value of money and, where appropriate, the risks         privately administered pension insurance plans on a mandatory, contractual
specific to the liability. An increase in the provision due to the passage of    or voluntary basis. The group has no further payment obligations once the
time is recognised as a finance charge.                                          contributions have been paid. The contributions are recognised as employee
                                                                                 benefit expense when they are due. Prepaid contributions are recognised




                                                                                                                                                                           Financial Statements
                                                                                 as an asset to the extent that a cash refund or a reduction in the future
                                                                                 payments is available.




                                                                                                                                                                      40
2.15.2 Profit sharing and bonus plans                                             Membership fees
The group recognises a liability and an expense for bonuses and profit sharing,   Membership fees are fixed fees invoiced to the members on a monthly basis.
based on a formula that takes into consideration the profit attributable to       Membership fees are recognised in the income statement in the period to
the company’s shareholders after certain adjustments. The group recognises        which the membership fee relates.
a provision where contractually obliged or where there is a past practice
that has created a constructive obligation.                                       Transaction fees, Clearing & Settlement fees
                                                                                  Transaction fees and Clearing & Settlement fees are volume-based fees.
2.16. Borrowings                                                                  The revenues are recognised in the income statement in full upon settlement
Borrowings are initially recognised at their fair value, net of transaction       of outstanding transactions. At year-end, transaction fees related to unsettled
costs incurred and subsequently measured at amortised cost. Loans are             transactions are accrued in the income statement.
classified as current unless the company has the right to defer settlement
for at least 12 months after balance sheet date.                                  Collateral income
                                                                                  Interest income from collateral is the interest received on the cash collateral
2.17. Accounts payable                                                            provided to APX-ENDEX in relation to clearing services. Collateral income
Accounts payable are obligations to pay for goods or services that have           is recognised in the income statement. Interest earned but not yet received
been acquired in the ordinary course of business from suppliers. Accounts         at the end of the year is accrued in the income statement.
payable are classified as current liabilities if payment is due within one year
or less (or in the normal operating cycle of the business if longer). If not,     Service Income
they are presented as non-current liabilities.                                    Service income includes income from service level agreements with Belpex
                                                                                  and Climex. Service income earned from Belpex until the acquisition date
Accounts payable are recognised initially at fair value and subsequently          (13 October 2010) is recognised in full in the group’s income statement.
measured at amortised cost using the effective interest method.                   The revenue is eliminated after acquisition. Furthermore, service income in-
                                                                                  cludes recharges of development costs. APX-ENDEX contributes to several
Principles for determination of results                                           external development projects. The 2010 development costs mainly relate to
                                                                                  a number of market coupling projects. Development costs for these projects
2.18. Revenue                                                                     are fully recoverable by either the external parties involved or through Share-
Revenue is recognised in the period in which services are rendered, to the        holders. These development costs relate to the costs of personnel dedicated




                                                                                                                                                                         Financial Statements
extent that it is probable that the economic benefits will flow to the company    to development projects and the charges of other development project parties
and if the revenue can be measured reliably. APX-ENDEX recognises the             involved, which are fully included in the line item of Product development
following types of revenue:                                                       costs as specified under note 23. Service income is recognised in the income
                                                                                  statement when invoiced. Amounts not invoiced at year-end are accrued.




                                                                                                                                                                    41
2.19 Financial income and expenses                                                     3. Financial risk management
Financial income and expenses are calculated using the effective interest             The business activities of APX-ENDEX expose the entities in the group to a
rate method. Gross interest income and expenses from the notional cash                number of risks. The policies set out below seek to minimise adverse effects
pooling are also included.                                                            of these risks on the group’s financial performance.


2.20. Income tax                                                                      Financial risk management is carried out by the treasury function of APX-ENDEX.
The tax expense for the year comprises current and deferred income tax.               A written treasury policy covering specific areas such as foreign exchange risk,
Income tax is recognised in the income statement except to the extent that            interest rate risk, credit risk is approved by the board of directors.
it relates to items recognised directly in other comprehensive income, in
which case it is recognised in equity.                                                3.1. Market risk
                                                                                      APX-ENDEX is exposed to market risk in relation to energy prices, foreign
Management periodically evaluates positions taken in tax returns with respect         exchange rates and interest rates. Risks are chosen to be mitigated, shared or
to situations in which applicable tax regulation is subject to interpretation.        accepted depending on the likelihood and impact of the risk in relation to the
It establishes provisions where appropriate on the basis of amounts expected          business activities and the availability of adequate risk responses. Risk manage-
to be paid to the tax authorities.                                                    ment is carried out under policies reviewed and approved by the Treasury
                                                                                      Committee and the Statutory Board. Financial risk management for the
Principles for determining cash flows                                                 clearing business is considered separate to that of the rest of the group.


2.21. Cash flow statement                                                             Energy price risk
Cash flows are calculated using the indirect method. Financing costs are              APX-ENDEX acts as counterparty in the contracts that are established on
classified under cash flow from operating activities.                                 each of the exchanges it services, with the exception of the exchanges that
                                                                                      are part of APX-ENDEX Derivatives B.V., which has outsourced all clearing
2.22. Cash flow from clearing activities                                              activities to ECC A.G. As a result of the outsourcing of clearing activities,
With the exception of the trades on the exchanges within APX-ENDEX                    APX-ENDEX Derivatives B.V. does not face energy price risk on the estab-
Derivatives B.V., APX-ENDEX acts as counterparty in the trades on the exchanges       lished contracts.
it operates or services. This results in cash flows relating from the purchase side
of the contracts and the sale side of the contracts. Although these cash flows        As central counterparty, APX-ENDEX does not assume a net position in the




                                                                                                                                                                               Financial Statements
do not impact the profit and loss statement directly, they are shown separately       energy markets, since it always assumes both a buying and selling position.
in the cash flow statement since they explain the significance of some the line       In relation to the delivery of the physical position, APX-ENDEX faces the risk
items on the face of the balance sheet.                                               that the seller does not deliver. To meet the delivery towards the buyer,
                                                                                      APX-ENDEX would need to buy the position in the market and would be
                                                                                      exposed to a market price risk. APX-ENDEX policy is to quantify the risk



                                                                                                                                                                          42
with certain likelihood and mitigate that risk in full. This risk is mitigated by   Interest rate risk
operating a margining framework. Changes to energy prices have no impact            APX-ENDEX is exposed to interest rate risk from a corporate perspective
on equity or the income statement.                                                  on its interest bearing liabilities and interest bearing assets.


Foreign exchange rate risk                                                          APX-ENDEX is exposed to interest rates from an operating perspective
APX-ENDEX has business activities in both Euro and Pound Sterling. APX-ENDEX        in relation to managing the cash collateral balances and from a financing
has a natural hedge, in the sense that Euro revenues are mostly associated          perspective in relation to the financing structure of the company. Since
with Euro costs and Pound Sterling revenues with Pound Sterling costs.              APX-ENDEX operates business activities in both Euro and Pound Sterling
APX-ENDEX does not currently hedge foreign exchange transaction risk.               it is exposed to both Euro and Pound Sterling interest rates. APX-ENDEX
APX-ENDEX policy is not to hedge the translation risk on the reported assets        policy is not to actively hedge the interest rate risk.
and not to actively hedge the risk on the remaining operational cash flow
from the UK business activities.                                                    Data from 2010 indicates that a shift of 60 basis points in interest rates is
                                                                                    reasonable. If interest rates would have been 60 basis points higher during
For subsidiaries with a Pound Sterling functional currency the translation          2010, this would increase the profit before tax by EUR 2.1 million (2009: EUR
risk for both monetary and non-monetary assets and liabilities materialises         2.3 million) from an operating perspective and would increase the profit before
in the foreign exchange reserves shown under equity. The changes in foreign         tax by EUR 0.02 million (2009: EUR 0.2 million decrease) from a financing
exchange rate have resulted in a 2010 increase of the foreign exchange reserve      perspective, resulting in a total positive impact of EUR 2.1 million (2009: EUR
of EUR 0.3 million (2009: increase of EUR 0.9 million). The translation risk for    2.1 million) for the group. APX-ENDEX operates two types of cash collateral
monetary assets and liabilities that are denominated in a different currency        accounts: escrow and ‘in name of’ accounts. Members using escrow accounts
to the functional currency, materialises in the financial income and expenses.      receive interest at market rates and therefore there is no impact on profit
The foreign exchange gain in 2010 amounts to EUR 0.1 million (2009: EUR 0.4         before tax of an increase in interest rates. ‘In name of’ accounts are operated
million gain).                                                                      on behalf of the member by APX-ENDEX and are subject to an interest haircut
                                                                                    such that an increase in interest rates will increase APX-ENDEX revenue until
The operational cash flow including changes in working capital in 2010 denomi-      the haircut cap is reached. Members are free to switch from ‘in name of’
nated in Pound Sterling amounts to plus GBP 1.0 million (2009: GBP 0.9 million).    accounts to escrow and at 31 December 2010 30% of accounts were escrow
                                                                                    accounts, holding a balance of EUR 49.9 million. This impact is included in
If exchange rates would have been higher by 0.10 EUR/GBP during 2010,               the EUR 2.1 million increase in profit before tax mentioned above.




                                                                                                                                                                           Financial Statements
this would increase profit before tax by EUR 0.2 million. Equity would be
increased by EUR 0.7 million, EUR 0.14 million from an increase in the result
of the year and EUR 0.53 million due to exchange rate differences in the
foreign currency reserve.




                                                                                                                                                                      43
3.2. Credit risk
APX-ENDEX bears credit risk exposure on all current assets. First, current         APX-ENDEX group currently has accounts with four financial institutions.
assets held with banks and financial institutions amounted to EUR 653 million      However, current assets are nearly all held with one financial institution resulting
on 31 December 2010 (31 December 2009: EUR 538 million). Second, current           in a significant concentration of credit risk. This risk is acknowledged and
assets arising from energy transactions amounted to EUR 188 million per year-      accepted by the board.
end 2010 (year-end 2009: EUR 124 million per year). Finally, current assets with
regular trade debtors and other receivables amounted to EUR 13.2 million           Credit risk arising from energy transactions
per 31 December 2010 (31 December 2009: EUR 2.0 million). The increase             APX-ENDEX acts as counterparty in the contracts that are established on each
in these positions can be attributed to the inclusion of Belpex, the increase      of the exchanges it services with the exclusion of APX-ENDEX Derivatives
in market prices for power and gas and changes to collateral policy. The year-     activities, which has outsourced clearing activities to ECC A.G. As a result
end amounts of the current assets can be taken as an indication of the maximum     of the outsourcing of clearing activities, APX-ENDEX Derivatives does not
credit risk exposure.                                                              face credit risk on the established contracts.


Credit risk arising from banks and financial institutions                          As central counterparty, APX-ENDEX does not assume a net position in the
In relation to the margining framework for energy transactions, APX-ENDEX          energy markets, since it always assumes both a buying and selling position.
manages a significant amount of cash collateral balances and irrevocable           In relation to the financial settlement, APX-ENDEX faces the risk that the
Letters of Credit. The cash collateral balances are held with ABN AMRO N.V.        buyer does not pay. Nevertheless, APX-ENDEX will have to pay the seller.
which has a rating of A (S&P rating).                                              APX-ENDEX mitigates this risk by operating a margining framework. The
                                                                                   top five energy only debtors make up 68% of the total position per year-end
Since 1 November 2010 each member may provide letters of credit with               2010 (year-end 2009: 70%), indicating a concentration of credit risk.
a maximum value of 10 million (EUR or GBP depending on the market) per
bank. This does not limit exposure to individual banks but it would require        Credit risk arising from regular trade debtors and receivables
a double default of both the issuing bank and the member for APX-ENDEX             The majority of the credit risk on regular trade debtor positions and receivables
to be affected. A minimum rating of A- (S&P rating) is required for irrevocable    is covered as well by the margining framework for energy transactions. No defaults
Letters of Credit. At 31 December 2010 letters of credit with a value of           occurred in 2010. Credit risk on the remaining positions is accepted and subject
EUR 701 million were held by APX-ENDEX (31 December 2009: EUR 732 million).        to monitoring. There is no significant concentration of credit risk.
Some members do still hold letters of credit in excess of EUR/GBP 10 million




                                                                                                                                                                               Financial Statements
per bank but are expected to spread their exposure over multiple banks by
the end of March 2011.




                                                                                                                                                                          44
3.3. Liquidity risk                                                                   3.4. Capital risk management
APX-ENDEX faces liquidity risk relating to both corporate activities and the          APX-ENDEX’s objectives for managing capital are to safeguard the group’s
clearing of energy transactions. Liquidity risks arising from the financial settle-   ability to continue as a going concern in order to provide returns for share-
ment of energy transactions are managed through the margining framework.              holders and benefits for other stakeholders and to maintain an optimal
                                                                                      capital structure to reduce the cost of capital.
Prudent liquidity risk management implies maintaining sufficient cash and
credit facilities. Management monitors rolling forecasts of the cash and              In order to maintain or adjust the capital structure, the group may adjust the
cash equivalents on the basis of expected cash flow. Headroom analysis is             amount of dividends paid to Shareholders, return capital to Shareholders,
performed by comparing net debt against total committed and uncommitted               issue new shares or sell assets to reduce debt.
credit facilities and takes into consideration covenant compliance and
regulatory requirements.                                                              During 2009, the main source of financing of APX-ENDEX business activities
                                                                                      has been equity. In 2010 the main source of finance has been both equity
APX-ENDEX has a Revolving Overdraft Facility and Credit Facility for                  and a loan of EUR 5 million.
EUR 25 million. This comprises                                                        In relation to the regulatory status of some of the markets the group operates
1) an Overdraft facility with an authorised limit of EUR 20 million;                  in, APX-ENDEX faces financial requirements set by regulators (AFM in the
2) a Revolving Committed Credit Facility with an authorised limit of                  Netherlands and FSA in the United Kingdom).
   EUR 5 million;
3) a Balance Compensation Facility in connection with the current account
   in EUR/ GBP, under which a maximum debit of EUR 37.5 million is permitted.




                                                                                                                                                                            Financial Statements
                                                                                                                                                                       45
The table below analyses the company’s financial instrument into relevant
maturity groupings based on the remaining period at the balance sheet
date to the contractual maturity date. The amounts disclosed in the table
are the contractual undiscounted cash flows.


Class of financial instruments per 31 December 2009
(EUR ’000)


                                                                              <1M     1M-3M     3M-1Y   1Y-5Y   >5Y     Total
Receivables                                                                   1,284     4,482     103       -     -     5,869
Debtors relating to energy transactions                                         610   123,915      77       -     -   124,602
Derivative financial instruments                                                40          -       -       -     -       40
Short-term bank deposits                                                     93,300    33,700       -       -     -   127,000
Carbon certificates held as collateral                                        9,066         -       -       -     -     9,066
Collateral in cash                                                          392,453         -       -       -     -   392,453
Cash and cash equivalents                                                    10,761         -       -       -     -    10,761
Total assets                                                                507,514   162,097     180       -     -   669,791


Accounts payable                                                              1,278     1,510       -       -     -     2,788
Creditors relating to energy transactions                                         -   123,915       -       -     -   123,915
Derivative financial instruments                                                40          -       -       -     -       40
Bank overdraft (without WC facilities)                                       93,294    33,700       -       -     -   126,994
Carbon certificates held as collateral                                        9,066         -       -       -     -     9,066
Liabilities from collateral                                                 392,453         -       -       -     -   392,453
Total liabilities                                                           496,131   159,125       -       -     -   655,256


Working capital facility                                                      8,016         -       -       -     -     8,016
Leases                                                                            -         -   1,030    956      -     1,986




                                                                                                                                     Financial Statements
Total off-balance sheet instruments                                           8,016         -   1,030    956      -    10,002




                                                                                                                                46
Class of financial instruments per 31 December 2010
(EUR ’000)


                                                        <1M     1M-3M     3M-1Y   1Y-5Y   >5Y     Total
Receivables                                            12,107     1,068     211     130     -    13,516
Debtors relating to energy transactions                 1,747   184,423       -       -     -   186,170
Derivative financial instruments                          25          -       -       -     -       25
Short-term bank deposits                                    -         -       -       -     -         -
Carbon certificates held as collateral                 37,851         -       -       -     -    37,851
Collateral in cash                                    643,943         -       -       -     -   643,943
Cash and cash equivalents                              17,217         -       -       -     -    17,217
Total assets                                          712,890   185,491     211    130      -   898,722


Accounts payable                                        1,097         -       -       -     -     1,097
Creditors relating to energy transactions                   -   184,676       -       -     -   184,676
Derivative financial instruments                          25          -       -       -     -       25
Borrowings                                             15,896         -       -       -     -    15,896
Carbon certificates held as collateral                 37,851         -       -       -     -    37,851
Liabilities from collateral                           643,943         -       -       -     -   643,943
Total liabilities                                     698,812   184,676       -       -     -   883,488


Working capital facility                                9,142         -   7,000       -     -    16,142
Leases                                                      -      305      519   2,194    34     3,052




                                                                                                               Financial Statements
Total off-balance sheet instruments                     9,142      305    7,519   2,194    34    19,194




                                                                                                          47
 4. Critical accounting estimates and judgements
Estimates and judgements are continually re-assessed. They are based on             pension liabilities and relating assets at balance sheet date, it is possible
historical experience and other factors including reasonable expectations           that the relating balance sheet items and profit and loss items could have
of future events. The underlying estimates and judgements of significant            a material impact on the financial statements. All other pension schemes
balances in the financial statement are discussed below.                            for the group qualify as defined contribution schemes.


4.1 Estimated impairment of goodwill                                                4.4 Fair value estimates
The group tests annually whether goodwill or other intangible assets have           The fair value of financial instruments traded in active markets is based
suffered any impairment, in accordance with the accounting policy stated            on quoted market prices at the balance sheet date. The quoted market
in note 2.6. The recoverable amounts of cash generating units have been             price used for financial assets held by the group is the current bid price.
determined based on value-in-use calculations. These calculations require
the use of estimates (note 7). The outcome of the annual impairment tests on        The nominal value less provision of trade receivables and payables are assumed
goodwill and other intangible assets are disclosed in note 5.1, 5.2, 5.3 and 5.4.   to approximate their fair values. The fair value of other financial liabilities for
                                                                                    disclosure purposes is estimated by discounting the future contractual cash
4.2 Income taxes                                                                    flows at the current market interest rate that is available to the group for similar
For the 2010 income tax calculation, APX-ENDEX has utilised all available           financial instruments.
losses from prior years except for APX-ENDEX Gas B.V. Given the current
performance, no deferred tax assets have been recognised for the losses             For all financial instruments the face value on the balance sheet is equal
arising from APX-ENDEX Gas B.V. This leaves an unrecognised deferred tax            to the fair value of the financial instrument unless specified otherwise.
asset of EUR 0.45 million relating to EUR 1.8 million in unrecognised losses
from 2008 and prior years.                                                          The accounting policies of financial instruments and their fair value estimates
                                                                                    are stated in the table below.
4.3 Pension benefits
Employees of APX-ENDEX Holding B.V. have a multi-employer pension                   Derivative financial instruments and carbon certificates held as collateral are
scheme. This pension scheme qualifies as a defined benefit scheme. IAS              stated at their fair value on the balance sheet date. The fair value is based on
19 requires that information such as the assets and liabilities relating to the     quoted prices in active markets for identical assets or liabilities. The fair value
defined benefit scheme are disclosed. The multi-employer fund cannot                estimates fall into the level 1 category of the IFRS fair value hierarchy.




                                                                                                                                                                                Financial Statements
provide this type of information on an employer level. Therefore, the pension
scheme is treated as if it were a defined contribution scheme. If the multi-        All other financial instruments are measured at cost. The relevant fair value
employer fund were able to provide information on the calculation of the            estimates are shown in the table on page 49.




                                                                                                                                                                           48
                                                             31 December 2010                 31 December 2009
(EUR ’000)
                                                             Loans,     Assets at fair        Loans,     Assets at fair
                                                        receivables,   value through     receivables,   value through
Financial instruments per class                            payables    profit and loss      payables    profit and loss
Financial assets at fair value through profit or loss              -                 -              -            1,900


Trade debtors                                                 5,839                  -         1,381                  -
Debtors relating to energy transactions                     186,170                  -       124,602                  -
Other receivables                                             4,006                  -         4,488                  -
Derivative financial instruments                                   -               25               -               40
Prepayments and accrued income                                3,671                  -         2,977                  -
Short-term bank deposits                                           -                 -       127,000                  -
Collateral in cash                                          643,943                  -       392,453                  -
Carbon certificates held as collateral                             -           37,851               -            9,066
Cash and cash equivalents and requirements                   17,217                  -        10,761                  -
Total financial instrument as assets                       860,846             37,876       663,662            11,006


Trade creditors                                               1,097                  -           999                  -
Creditors relating to energy transactions                   184,676                  -       123,915                  -
Income tax payable                                                 -                 -           276                  -
Other liabilities                                            12,774                  -         1,513                  -
Derivative financial instruments                                   -               25               -               40
Accruals and deferred income                                  2,996                  -         2,088                  -
Borrowings                                                   15,858                  -       135,010                  -
Carbon certificates held as collateral                             -           37,851               -            9,066
Liabilities from collateral                                 643,943                  -       392,453                  -
Total financial instrument as liabilities                  861,344             37,876       656,254              9,106




                                                                                                                               Financial Statements
                                                                                                                          49
 5. Intangible assets
The net carrying amount of the intangible assets can be specified as follows:



Consolidated Intangible fixed assets
(EUR ’000)


                                                                                    Membership     Membership           Technical
2009                                                                  Goodwill      Commitment       Portfolio     Infrastructure    Total 2009
Acquisition or production costs                                          15,352          10,967          2,763             5,609        34,691
Accumulated impairment and amortisation                                   3,680               -          1,288             4,716          9,684
Net book value as at 1 January                                           11,672         10,967           1,475               893        25,007


Acquisition or production costs                                                 -             -              -                59 –          59 –
Accumulated impairment and amortisation                                         -             -              -                71            71
Net reclassification                                                            -             -              -               130 –         130 –


Additions                                                                       -             -              -               162           162
Amortisation                                                                    -          997 –           387 –             526 –        1,910 –
Exchange rate differences                                                   123               -              7                  -          130
Book value as at 31 December                                             11,795          9,970           1,095               399        23,259


Acquisition or production costs                                          15,475          10,967          2,770             5,712         34,924
Accumulated impairment and amortisation                                   3,680            997           1,675             5,313         11,665
Net book value as at 31 December                                         11,795          9,970           1,095               399        23,259




                                                                                                                                                         Financial Statements
                                                                                                                                                    50
                                                     Membership     Membership           Technical    Assets under
2010                                      Goodwill   Commitment       Portfolio     Infrastructure    construction   Total 2010
Acquisition or production costs             15,475        10,967          2,770              5,712               -      34,924
Accumulated impairment and amortisation      3,680          997           1,675             5,313                -       11,665
Net book value as at 1 January              11,795        9,970           1,095               399                -      23,259


Acquisition or production costs                  -             -              -               324                -         324
Accumulated impairment and amortisation          -             -              -               232 –              -         232 –
Net reclassification                             -             -              -                92                -          92


Acquisition Belpex                           6,779             -         10,525             1,046                -      18,350
Additions                                        -             -              -               163              60          223
Amortisation                                     -          997 –           493 –             469 –              -        1,959 –
Exchange rate differences                      59              -              -                  -               -          59
Book value as at 31 December                18,633        8,973          11,127             1,231              60       40,024


Acquisition or production costs             20,635        10,967         13,295             7,245              60       52,202
Accumulated impairment and amortisation      2,002         1,994          2,168             6,014                -       12,178




                                                                                                                                         Financial Statements
Net book value as at 31 December            18,633        8,973          11,127             1,231              60       40,024




                                                                                                                                    51
5.1. Goodwill                                                                    Apart from the goodwill in relation to Belpex, all assumptions require significant
The goodwill relates to the acquisition of the Dutch spot market activities in   deviations on a stand-alone basis to reduce the remaining headroom to zero.
May 2001, the acquisition of the UK Gas business in July 2003, the acquisition   EBITDA margins would need to be reduced below the 10% range and discount
of the derivatives markets in December 2008 and the acquisition of Belpex        rates would need to be increased by at least 5% to trigger a possible impairment.
S.A. in October 2010. Goodwill is tested for impairment. All goodwill has        The reduction of the long-term growth to zero would not affect the outcome
been tested for impairment separately and there was no reason for impairment.    of the impairment test. With respect to the goodwill in Belpex, deviations
Goodwill has been tested for impairment under the following assumptions:         of less than 1% could result in a possible impairment. However based on the
                                                                                 prudency applied in the underlying assumptions, no impairment is required.
(EUR ’000)                                                                       Furthermore, the impairment test does not consider potential synergy effects
                                                                                 resulting from the acquisition, which could lead to a reduction of the service
Goodwill            Spot Power NL        Spot Gas UK       Endex       Belpex    fee paid. In addition, through the acquisition, the group secured the interest
Goodwill                       4,447             1,903      5,504        6,779   income on collateral held by Belpex’s members resulting in additional income
Discount rate                   10%               10%         10%         10%    as well, justifying partial allocation of goodwill to the clearing business if needed.
Long Term growth                 2%                2%          0%           2%
                                                                                 5.2. Derivatives Membership Commitment
                                                                                 The Membership Commitment in APX-ENDEX Derivatives B.V. is recognised
The revenue and cost projections used for the upcoming four years are            based on the fact that a number of its members have committed themselves
based on the long-term outlook as approved by management. The long-term          to sustain and increase the derivatives trading volumes. This reinforces the
growth rate applied for the derivatives business is the growth rate applied      Membership Portfolio (see note 5.3) and provides the exchange with ample
to determine the terminal value. For the next three years however, significant   liquidity. Based on this Membership Commitment significant growth of trading
growth is expected (10% per annum), which is mainly attributed to the strong     volume is expected until 2013. The Membership Commitment is an essential
performance of the gas derivatives (TTF) market. After four years of strong      driver underlying the derivatives business in its growing phase. As a value
growth, the market is expected to become saturated resulting in a no growth      component its useful life exceeds the duration of the Membership commitment
scenario on the longer term.                                                     to 11 years.


                                                                                 The Membership Commitment has been valued on an income approach
                                                                                 based on the difference between the enterprise value of APX-ENDEX




                                                                                                                                                                               Financial Statements
                                                                                 Derivatives B.V. with and without the Membership Commitment. The enterprise
                                                                                 value analysis is based on the DCF method. The Membership Commitment
                                                                                 is amortised on a straight-line basis over its useful life.




                                                                                                                                                                          52
The intangible assets have been tested based on a 10% WACC and a zero             The APX-ENDEX Derivates contracts with members have duration of one year,
percent long-term growth rate. Based on the outcome of the test, there            but continue in subsequent years unless cancelled. The Membership Portfolio
was no need for impairment. The sensitivities for changes in the underlying       has been valued using the income approach based on the Multiple-period
assumptions are as follows:                                                       Excess Earnings Method (“MEEM”). The membership portfolio is amortised
                                                                                  on a straight-line basis over its useful life. It has been tested based on a 10%
                                                                                  WACC and a zero percent long-term growth rate. Based on the outcome of
EUR (in million)                                                      Carrying    the test, there was no need for impairment. The sensitivities for changes in
                                           recoverable amount         Amount      the underlying assumptions are as follows:
wACC                                      9% 10% 11% 12% 13%
Membership Commitment                    16.3 14.7 13.4 12.3 11.3           9.0
                                                                                  EUR (in million)                                                           Carrying
Projected revenue growth realised         0% 25% 50% 75%100%                                                                   recoverable amount            Amount
Membership Commitment                     1.9   5.1   8.3 11.5 14.7         9.0   wACC                                       9% 10% 11% 12% 13%
                                                                                  Membership Portfolio                       8.8    4.5   4.2   4.0    3.8        0.8
Deviation to projected cost base        -20% -10%     0% 10% 20%
Membership Commitment                    15.9 15.3 14.7 14.1 13.5           9.0   Projected revenue growth realised          0% 25% 50% 75%100%
                                                                                  Membership Portfolio                       4.5    4.5   4.5   4.5    4.5        0.8


5.3. Derivatives and Belpex Membership Portfolio                                  Deviation to projected cost base         -20% -10%      0% 10% 20%
The acquisition of the outstanding 90% shares of Belpex S.A. resulted in the      Membership Portfolio                       8.2    6.4   4.5   2.6    0.7        0.8
recognition of an intangible asset for the company’s existing membership
portfolio (EUR 10.5 million). The acquisition was finalised on 13 October 2010,
and current results and market circumstances give no reason to revise the         5.4. Technical infrastructure
assumptions applied during the purchase price allocation. The purchase            APX-ENDEX runs its spot market exchanges on a trading platform called
price allocation was calculated based on a WACC of 10%, assuming 2% long-         EuroLight. Development costs for the trading platform have been recognised
term growth per annum. Deviations of less than 1% in either of the assumptions    as technical infrastructure. No triggering event for the EuroLight trading system
would lead to a possible impairment. No impairment is required based on           has given rise to impairment at 31 December 2010. Other technical infra-




                                                                                                                                                                             Financial Statements
the arguments given in note 5.1.                                                  structure relates to capitalised development costs for derivative markets.




                                                                                                                                                                        53
6. Property, plant and equipment
The net carrying amount of property, plant and equipment can be specified
as follows:




(EUR ’000)

                                                                                            Fixtures
Property, plant and equipment                                               Hardware     and fittings    Total 2009
Acquisition or production costs                                                 2,141            634          2,775
Accumulated impairment and amortisation                                         1,813            624          2,437
Net book value as at 1 January                                                   328              10           338


Reclassification, incl.:
Acquisition or production costs                                                  263 –            61 –         324 –
Accumulated impairment and amortisation                                          376 –            78 –         454 –
Net reclassification                                                             113              17           130


Additions                                                                        465              23           488
Depreciation                                                                     287 –            23 –         310 –
Exchange rate differences                                                          1                -            1
Book value as at 31 December                                                     620              27           647


Acquisition or production costs                                                2,343             596          2,939
Accumulated impairment and amortisation                                        1,723             569         2,292
Net book value as at 31 December                                                 620              27           647




                                                                                                                            Financial Statements
                                                                                                                       54
There has been a reclassification of assets classified under property, plant
and equipment to technical infrastructure. Assets under construction relate to
investments in ongoing projects that are expected to go live in the second
half of 2011.



(EUR ’000)

                                                                                    Fixtures     Assets under
Property, plant and equipment                                   Hardware         and fittings    construction   Total 2010
Acquisition or production costs                                      2,343               596                -        2,939
Accumulated impairment and depreciation                              1,723               569                -       2,292
Net book value as at 1 January                                        620                 27                -         647


Reclassification, incl.:
Acquisition or production costs                                        324 –                -               -         324 –
Accumulated impairment and amortisation                                232                  -               -         232
Net reclassification                                                    92 –                -               -          92 –


Additions                                                             509                 35             529         1,073
Acquisition Belpex                                                      12                  -               -          12
Depreciation                                                           312 –              33 –              -         345 –
Exchange rate differences                                                -                  -               -            -
Book value as at 31 December                                          737                 29             529        1,295


Acquisition or production costs                                      2,540               631             529        3,700
Accumulated impairment and depreciation                              1,803               602                -       2,405
Net book value as at 31 December                                      737                 29             529        1,295




                                                                                                                                   Financial Statements
                                                                                                                              55
7. Financial assets at fair value through profit or loss                               8. Deferred income tax assets



Investments (EUR ’000)                                    2010             2009       Deferred income tax assets (EUR ’000)                   2010           2009
Value as at 1 January                                     1,900                 900   Balance as at 1 January                                  882           1,063
Acquisition Belpex                                        1,900 –                 -   Additions                                                200                 -
Fair value changes through profit and loss                    -            1,000      Charges through profit and loss                          646 –             251 –
Value as at 31 December                                       -            1,900      Change in tax rate                                          1–               -
                                                                                      Exchange rate differences                                   7–              70
                                                                                      Balance as at 31 December                                428               882
In June 2005, APX-ENDEX participated in the establishment of Belpex S.A.
(not listed), holding 10% shares at nominal value. The amounts shown in 2009
relate to this investment. Since the remaining 90% of shares were acquired            The deferred income tax assets relate to fiscal loss compensation and
during 2010 Belpex is fully consolidated in 2010 and as a result no financial         differences in depreciation rates of property, plant and equipment.
asset figure appears.                                                                 The balance at 31 December 2010 only relates to difference in depreciation
                                                                                      rates of PP&E as all recognised tax losses have been utilised during the year.
                                                                                      The charges through profit and loss relate to the recognition and use of tax
                                                                                      losses. Tax assets recognised in the balance sheet are expected to be fully
                                                                                      recoverable. EUR 0.1 million is recoverable within 12 months.
                                                                                      Based on the current performance, the fiscal loss compensation available
                                                                                      for the Belgian gas spot market was not recognised on the balance sheet.
                                                                                      The total unrecognised losses rising from APX-ENDEX Gas amount to
                                                                                      EUR 1.8 million, regarding 2008 and prior years (2009: EUR 1.8 million).




                                                                                                                                                                              Financial Statements
                                                                                                                                                                         56
 9. Trade debtors and debtors relating to energy transactions
A provision for doubtful trade debtors (not relating to energy transactions)
amounting to EUR 40 thousand has been recognised in 2010 (2009: EUR 50
thousand), giving a total doubtful debt provision of EUR 90 thousand.


The table below shows an ageing analysis for outstanding debtors:


Ageing analysis 2009 (EUR ’000)                                                        <1M     1M-3M   3M-1Y   >1Y     Total
Total trade debtors                                                                     822      203     122   234     1,381
Debtors relating to energy transactions                                              124,602       -       -     -   124,602
Total debtors                                                                        125,424     203     122   234   125,983


Ageing analysis 2010 (EUR ’000)                                                        <1M     1M-3M   3M-1Y   >1Y     Total
Total trade debtors                                                                    5,087     191     154   408     5,839
Debtors relating to energy transactions                                              186,170       -       -     -   186,170
Total debtors                                                                        188,939     807     154   934   190,834



The ageing analysis is based on time since invoice date. At 31 December 2010
none of the debtors relating to energy transactions were due. Of the trade
debtors an amount of EUR 0.7 million was not yet due. The balance older than
a year relates to a number of debtor positions which for which a total doubtful
debt provision of EUR 90 thousand has been taken.
For trade debtors relating to energy transactions, no provision for doubtful
debt has been formed in relation to the system of credit risk measures in
place. Trade debtors and debtors relating to energy transactions have a
carrying value equal to their fair value. Credit risk is concentrated since the
top five total debtors (energy and other) make up 65% of this balance (2009: 70%).




                                                                                                                                    Financial Statements
All balances have been settled in January and February 2011.


The significant rise of debtors is mainly due to a sharp increase in invoicing
per end of 2010 for particular project related revenues.



                                                                                                                               57
10. Other receivables                                                              11. Derivative financial instruments
                                                                                   The clearing activities of APX-ENDEX give rise to the following undelivered
                                                                                   positions on balance sheet date.
other receivables (EUR ’000)                             2010             2009
Amounts due from related parties                        1,238                 12   APX Power NL
Other receivables                                       1,038                620   Day-ahead contracts traded on 31 December have a delivery date of
VAT                                                          -            2,356    1 January of the next year.
Corporate tax                                           1,730             1,500
Balance as at 31 December                               4,006             4,488    APX Power UK
                                                                                   Undelivered positions arise from contracts traded on or before
                                                                                   31 December with delivery in the next year.
The carrying values of the other receivable balances are equal to the fair
value of these balances.                                                           APX Gas UK, NL and Zeebrugge
A provision for doubtful debtors related to amounts due from related               Undelivered positions arise from contracts traded on or before
parties has been taken in 2010 amounting to EUR 0.6 million (2009:nil).            31 December with delivery in the next year.


                                                                                   Derivatives
                                                                                   Since clearing of contracts on the APX-ENDEX Derivatives exchange is
                                                                                   outsourced to a service provider no undelivered positions arise on balance
                                                                                   sheet date.


                                                                                   The amount has been recognised as financial instruments under current
                                                                                   assets and equally under current liabilities.


                                                                                   12. Short-term bank deposits
                                                                                   In 2009 cash collateral was held in short-term bank deposits with a maximum
                                                                                   duration of three months. In 2010 this structure has been replaced during the




                                                                                                                                                                        Financial Statements
                                                                                   migration to ABN AMRO and as a result short-term deposits are no longer used.




                                                                                                                                                                   58
13. Collateral in cash                                                                 15. Equity
Collateral in cash is cash that is provided to APX-ENDEX in relation to the
margining framework for energy transactions. Due to the legal restructure              Share capital
that took place in 2010, clearing is now performed by APX-ENDEX Clearing               APX-ENDEX Holding B.V. has an authorised capital of EUR 3 million divided into
B.V. and APX Commodities Ltd. only.                                                    three million shares of EUR 1 each. In 2010, APX-ENDEX has issued an additional
                                                                                       260,506 shares. The total number of shares issued and paid-up is 1,302,506.
The amounts of cash collateral have increased in 2010 due to a restructure of
collateral arrangements. A cap on the amount that can be provided in the form          Share premium
of Letters of Credit of EUR/GBP 10 million per bank per member has increased           The share premium reflects the difference between the nominal value of the
the cash collateral levels. Collateral balances are also sensitive to traded volumes   shares and the price paid for the shares at the moment of issuing. In 2010,
and market prices as these increase collateral requirements. UK Gas, which makes       APX-ENDEX has issued an additional 260,506 shares with a share premium
up the largest requirement, had prices significantly higher at 31 December             of EUR 20,839,494.
2010 at 61.5p per therm compared to 31 December 2009 at 30.6p per therm.
                                                                                       Foreign currency reserve
14. Carbon certificates held as Collateral                                             The net asset values of the foreign currency (UK) operations including good-
In relation to the carbon clearing activities, APX-ENDEX receives carbon               will are translated to a Euro value. Currency translations are shown as equity
certificates as collateral. The certificates are valued at their market value.         movement. The foreign currency reserve relates to the difference resulting
The certificates can only be used as collateral in terms of delivery.                  from translation of foreign currency participating interests in the UK including
                                                                                       goodwill. The foreign currency reserve is a non-distributable reserve.

                               Number of          Market price        Market value
Year (EUR ‘000)                certificates       31 Dec. 2010        31 Dec. 2010     Retained earnings
Total 2009                         723,570           EUR 12.53                9,066    Other reserves comprises unappropriated net income of prior years.
Total 2010 - EUA                 2,606,295           EUR 14.24                37,114
Total 2010 - CER                      3,669           EUR 11.78                   43   Unappropriated result
Total 2010 - ERU                     59,241           EUR 11.71                  694   The unappropriated result comprises the current year result.
Total 2010                                                                   37,851
                                                                                       Dividend




                                                                                                                                                                               Financial Statements
                                                                                       A dividend of EUR 20 million was declared and paid during 2010 (2009:nil)
                                                                                       prior to the share issue.




                                                                                                                                                                          59
16. Deferred income tax liabilities

(EUR ’000)

                                                                                                ENDEX               Belpex
Deferred income tax liabilities                                         Goodwill            intangibles         intangibles          Total 2010        Total 2009
Balance as at 1 January                                                    1,139                  2,822                   -              3,961             4,285
Acquisitions                                                                     -                        -           3,158               3,158                 -
Charges through profit and loss                                                  -                  324 –               66 –               390 –             324 –
Tax rate changes                                                                 6–                     49 –              -                 55 –                -
Balance as at 31 December                                                  1,133                  2,449              3,092               6,674             3,961
To be recovered within 12 months                                                 -                  324                394                 718               324


The deferred tax liabilities result from intangible assets recognised
in the business combinations that are not identified for tax purposes.



17. Creditors relating to energy transactions                                         18. Other liabilities
Creditors relating to energy transactions have a carrying value equal to
their fair value. All balances have been settled in January and February 2011.        other liabilities (EUR ’000)                           2010             2009
                                                                                      Social security                                             35           279
                                                                                      VAT                                                  11,853              346
                                                                                      Other liabilities                                       886              888
                                                                                      Balance as at 31 December                            12,774            1,513


                                                                                      The increase in VAT payable is due to the consolidation of Belpex,
                                                                                      which has a VAT payable of EUR 10.8 million.




                                                                                                                                                                          Financial Statements
                                                                                                                                                                     60
19. Borrowings                                                                          Security has been provided for the borrowing facilities in the form of a pledge
                                                                                        of debtors. A joint liability agreement is in place, with all entities except Belpex,
(EUR ‘000)                                                                              jointly liable for the credit facilities. There are also a number of covenants

                                               Bank                                     related to the credit facilities:
Borrowings APX-ENDEX                      overdrafts         Loans            Total     •   At least 51% of share capital of APX-ENDEX Holding must be held
Balance as at 1 January                      135,010               -       135,010          by TenneT Holding B.V. and N.V. Nederlandse Gasunie;
                                                                                        •   No dividend payments may be made until the loan is repaid;
Additions to loans                                            5,000          5,000      •   Interest coverage ratio must be a minimum of 3;
Redemption of overdraft due to                127,000 –            -       127,000 –    •   Leverage ratio must be a maximum of 3 and
move of collateral to ABN AMRO                                                          •   No material investments without permission from ABN AMRO.
Use of overdraft                                2,848              -          2,848
                                                                                        The large reduction in bank overdrafts from 2009 is due to the restructuring
Balance as at 31 December                      10,858         5,000         15,858      of banking arrangements as a result of the transfer to ABN AMRO. In 2009
                                                                                        a notional balancing pool was used to place cash provided as security in
                                                                                        short-term bank deposits. This is no longer the case in 2010.
All borrowing is denominated in Euros. Available facilities consist of a
EUR 20 million uncommitted overdraft, a 5 million committed credit line and             The fair value of current borrowings equals their carrying amount.
a EUR 7 million short-term loan. The group has EUR 16,1 million of undrawn
borrowing facilities, all floating rate and expiring within one year. All borrowing
has an exposure to interest changes of 3 months or less. The bank overdraft
facility is a group facility, with all entities able to drawn upon it. The loan taken
in 2010 is repayable within 1 year, with interest at 1-month Euribor plus 2.5%.




                                                                                                                                                                                     Financial Statements
                                                                                                                                                                                61
20. Revenues                                                                          Interest income from collateral is the interest received on the cash collateral
                                                                                      provided to APX-ENDEX in relation to clearing services. The reduction in income
revenues (EUR ’000)                                             2010          2009    from collateral can be contributed to both the re-structure of collateral arrange-
Transaction fee                                                 9,052         8,151   ments through the introduction of escrow accounts which give higher interest
Clearing & settlement fee                                      3,626          3,308   to the member and the lower interest rates during 2010.
Membership and entrance fee                                    8,281          7,650
Service income                                                  6,742         4,311    21. Other Income
Interest income from collateral                                2,427          2,933
Total                                                         30,128        26,353    other Income (EUR ’000)                                        2010          2009
                                                                                      Belpex revaluation                                                  -        1,000
Revenue from the APX-ENDEX exchanges consists of transaction fees, clearing           Price correction Dutch Power spot market activities                 -         1,410
& settlement fees, membership fees, and entrance fees. The increase of revenue        Total                                                               -        2,410
includes the effect of the consolidation of Belpex B.V. since the merger in October
2010 in the financial statement.
                                                                                       22. Employee benefits
In addition to operating own exchanges, APX-ENDEX also provides exchange
related services. Service income includes the Belpex service contract, the            Personnel expenses (EUR ’000)                                  2010           2009
TLC and CWE market coupling services. Since 13 October 2010 the Belpex                Wages and salaries                                             7,730          7,459
service revenue has been eliminated due to the acquisition. APX-ENDEX                 Pension costs                                                    636              655
provides clearing and settlement services to New Values for the Climex                Other social security costs                                      625              596
market. Since October revenue from this service has not been recognised               Other employee expenses                                          790              655
as it is not expected that it can be collected.                                       Temporary staff                                                1,836          1,957
Service income also includes recharges of development costs. APX-ENDEX                Total                                                        11,617         11,322
contributes several external development projects. Half of the 2010 develop-
ment costs relate to the CWE market coupling project, which is carried                Number of employees                                            2010           2009
out with other CWE parties involved. Development costs for the CWE are                Average FTE                                                      122              107
initially recoverable by either CWE parties or through TenneT. Other significant      Average headcount                                                130              113




                                                                                                                                                                                   Financial Statements
development projects in 2010 are the Interim Tight Volume Coupling project
(ITVC), the BritNed market coupling project and the Cross-Border Intraday             The increase in 2010 expenses is an effect due to the full consolidation
development project. For each of these projects a cost recovery contract              of Belpex N.V. in the financial statements since 13 October 2010 and the
is signed.                                                                            increase in the number of employees during 2010.




                                                                                                                                                                              62
                                                          remuneration               remuneration
Directors’ remuneration 2009 (EUR ’000)                          fixed                   variable                       Pension                    Total 2009
B. den Ouden                                                           170                       66                           40                           276
L. Schmeddes                                                           137                       49                           34                          220
P. Schuurs                                                             177                       66                           43                          286
Total                                                                  484                      181                          117                          782


                                                          remuneration               remuneration
Directors’ remuneration 2010 (EUR ’000)                          fixed                   variable                       Pension                    Total 2009
B. den Ouden                                                           170                       44                           40                          254
L. Schmeddes                                                           132                       41                           34                          207
P. Schuurs                                                             180                       46                           44                           270
C. Vandenborre                                                          32                        1                            4                            38
Total                                                                  514                      132                          122                          769



The variable remuneration has been based on achieving targets in the         Supervisory board remuneration (EUR ’000)                   2010            2009
financial year. Ms Vandenborre has become a director on 13 October 2010      J.B.M. ten Berge                                               18              18
as a result of the acquisition of Belpex.                                    H.A.T. Chin-Sue (payment to N.V. Nederlandse Gasunie)          16              16
                                                                             J.M. Kroon (payment to TenneT Holding B.V.)                    14              14
The variable remuneration includes short-term and long-term components.      G.H. de Marez Oyens                                            14              14
The short-term component is based on achieving targets in the financial      J.R. Steinhauser                                               16              16
year. The long-term component is based on pay-out in the financial year.     R. de Jong                                                     16              16
The pension payment is defined on the basis of the premiums paid.            E. Bosman                                                      12              14
                                                                             D. Dobbeni (payment to Elia System Operator S.A.)               3               -
                                                                             Total                                                        109             108




                                                                                                                                                                      Financial Statements
                                                                             Mr Dobbeni was appointed as a member of the Supervisory Board on 13 October
                                                                             as a consequence of the acquisition of Belpex S.A. and share issue to Elia System
                                                                             Operator S.A. He replaced Mr Bosman who resigned on the same day.




                                                                                                                                                                 63
 23. Other operating expenses                                                          24. Financial income and expenses

other operating expenses (EUR ’000)                          2010             2009     Financial income (EUR ’000)                                2010           2009
Housing                                                     1,799             1,287    Interest balancing compensation                           2,012          6,003
IT (trade system)                                           3,978             3,354    Other financial income                                      145               353
Product development                                              -            1,024    Foreign exchange gains                                      134               416
Consulting and advisory services                            2,765             1,618    Total                                                     2,291          6,772
Marketing and communication                                 1,082                899
Insurance                                                     272                306   Interest balancing compensation relates to the gross presentation of the
Travel expenses                                               612                703   notional balancing pool result. This is compensation for the notional pool
Provision for receivables                                     859                  -   expenses accounted for as financial expenses. Due to a change in banking
Miscellaneous expenses                                      1,054             1,332    structures the notional pool for collateral securities is no longer used as
Total                                                      12,421         10,523       per June 2010. Other financial income consists mainly of interest income
                                                                                       received on corporate cash.
Overall costs were higher in 2010, EUR 1.3 million of which is due to the full
consolidation of Belpex S.A. since the acquisition in October 2010. Housing
costs have increased in 2010 due to the pay back of a rent-free period in              Financial expenses (EUR ’000)                              2010           2009
relation to the cancellation of an office lease. There was an impairment of            Interest expenses from interest pooling                   2,012          6,003
trade receivables of EUR 0.7 million relating to services provided to third            Interest expenses for security provided                        -              203
parties (e.g. not regular trade debtors) shown in provisions in the table above.       Other interest expenses                                     234               175
The group incurred extra costs in various areas relating to business develop-          Total                                                     2,246          6,381
ment projects for market coupling in the Central West European area.


Miscellaneous costs include one-off costs relating to carbon clearing of
EUR 0.2 million, bank charges of EUR 0.2 million, and EUR 0.4 million of costs
recharged external project parties.




                                                                                                                                                                                Financial Statements
Product development costs are not shown in 2010 due to a change in the way
expenses are recorded and are now included in the other relevant line items.




                                                                                                                                                                           64
 25. Income tax                                                                      26. Rights and obligations not included in the balance sheet
                                                                                    The group leases various offices under operating lease agreements.
Current tax (EUR ’000)                                   2010          2009         The lease terms are between 1 and 6 years. The future aggregate minimum
Current income tax                                        797               850     lease payments under non-cancellable operating leases are as follows:
Tax charges previous years                                179 –              70
Changes in deferred tax assets                            654               251     Lease payments office space (EUR ’000)               after 2010      after 2009
Changes in deferred liabilities                           445 –             324 –   No later than 1 year                                         824          1,030
Total                                                     827               847     Later than 1 year and no later than 5 years                2,194            956
                                                                                    Later than 5 years                                            34                  -
The tax calculated on the profit before tax differs from the theoretical                                                                       3,052          1,986
amount that would be calculated using the weighted average tax rate
applicable. The schedule below shows the differences.                               APX-ENDEX has provided a number of bank guarantees, totalling EUR 11.2
                                                                                    million in connection with the office lease, market coupling obligations and
                                                                                    adherence to the Belgian and Netherlands power net code.
Income tax calculation (EUR ’000)                        2010              2009
Profit before tax                                        3,831         5,099        APX-ENDEX Derivatives B.V. entered into an agreement with European
                                                                                    Commodity Clearing AG (ECC), whereby the latter offers central counterparty
Weighted theoretical average rate                       27.5%          24.2%        services for trades in Dutch power, UK power, Belgian power and TTF natural
Theoretical income tax charge                            1,054             1,234    gas contracts registered via the APX-ENDEX Derivatives B.V. OTC clearing
                                                                                    services or contracts traded on the Regulated market operated by APX-ENDEX
Non taxable income and expenses                              8              524 –   Derivatives. The initial term runs until 31 December 2013.
Differences in deferred tax rates                          54 –                -
Tax charges previous years                                 179 –             70     APX-ENDEX Derivatives B.V. entered into an agreement with EEX, in which
Addition to unrecognised tax losses                          -               67     EEX grants APX-ENDEX certain call options to participate in the shareholding
Actual income tax charge                                  827               847     of its subsidiary ECC and APX-ENDEX grants EEX a call option to repurchase
                                                                                    ECC shares that are acquired by APX-ENDEX as a result of exercising such a pur-
Although the income tax rate differs from the average rate the impact of            chase option and subsequently APX-ENDEX does not meet certain conditions.




                                                                                                                                                                               Financial Statements
Belpex S.A. on the total profit was not significant enough to have a large
impact on the weighted average.




                                                                                                                                                                          65
APX-ENDEX has granted the right to TenneT TSO B.V. to acquire the intellectual         29. Cash generated from operations
property rights of the trilateral market coupling algorithm for a fixed price under
conditional events.                                                                   Cash generated from operations (EUR ’000)                  2010          2009
                                                                                      Net result after taxation                                  3,004         4,252
APX-ENDEX holds an amount of EUR 701 million of bank guarantees from                  Tax                                                          827           847
members to cover trading margins (31 December 2009: 732 million). In addition         Interest income                                              145 –       6,772 –
to the collateral in cash shown on the balance sheet, cash collateral is held         Interest expense                                             234         6,381
in escrow accounts to cover trading exposure. In December this amounted               Amortisation and depreciation                              2,304         2,220
to EUR 49.9 million.                                                                  Impairment charges and value adjustments                        -             -
                                                                                      Fair value changes through profit and loss                      -        1,000 –
                                                                                      Net movement in provisions                                      -             -
 27. Subsequent events                                                                Changes in working capital                                 8,520         5,347 –
On 1 March 2011 APX-ENDEX announced that it will stop to provide clearing             Total                                                    14,744            581
and settlement services to Climex for the secondary carbon certificates market
with immediate effect. APX-ENDEX will continue to provide these services              The large fluctuation in changes in working capital is due to a large VAT payable
for the already committed primary government auctions in April 2011 but               position, whereas the group was holding a VAT receivable position in 2009.
will stop its carbon related services altogether after completion of these
primary auctions. This decision does not affect the financial statements
as presented in this report.



 28. Cash flow from clearing activities
APX-ENDEX acts as counterparty in the trades on the exchanges it operates or
services. This results in cash flows relating from the sale and purchase of power,
gas and carbon.


The increase in cash flow from clearing activities relates to the inclusion of




                                                                                                                                                                               Financial Statements
Belgian power clearing and the increase in market prices of the traded contracts
on APX-ENDEX gas and power markets. The decrease in cash flow from carbon
clearing is due to the decrease in traded volumes in 2010 compared to 2009.




                                                                                                                                                                          66
30. Business Combinations                                                         The acquired business contributed revenues of EUR 1.6 million and net income
                                                                                  EUR 0.08 million to the group for the period from 13 October 2010 to
Belpex S.A.                                                                       31 December 2010. If the acquisition had occurred on 1 January 2010, the
On 13 October 2010, APX ENDEX completed the acquisition of the remaining          acquired business revenue would have been EUR 5.9 million and acquired
90% of the outstanding shares in Belpex S.A. As from that date APX-ENDEX          net income would have been EUR -0.3 million. The results of the subsidiary
Holding B.V. holds 100% of the shares in Belpex S.A. The effective date of        have been adjusted to reflect the additional amortisation that would have
control is 13 October 2010.                                                       been charged assuming the fair value adjustments to intangible assets had
                                                                                  applied from 1 January 2010 together with the consequential tax effects.
(EUR ’000)

                                                                   Acquiree’s
Assets and liabilities acquired              Fair Value      carrying amount
Membership portfolio                             10,525                       -
Other intangible assets                           1,046                  1,046
Tangible assets                                      12                      12
Deferred tax asset                                   75                      75
Cash and cash equivalents                         3,721                  3,721
Deferred tax liability                           (3,158)                      -
Fair value of net assets                         12,221                  4,854
Goodwill                                          6,779                       -
Total purchase consideration                     19,000                       -


Purchase consideration in cash                   17,100                       -
Cash and cash equivalents                         3,721 –                     -
Cash outflow on acquisition                     13,379                        -




                                                                                                                                                                      Financial Statements
                                                                                                                                                                 67
31. Related party transactions

(EUR ’000)
                                  TenneT Holding     N.V. Nederlands
                                   B.V. and group        Gasunie and       Fluxys NV and    Elia Systems   other related
related party transactions 2009        companies    group companies     group companies    operator N.V.         parties   Total 2009
Profit and loss
Trade related revenues                       480                 18                  15                -               -         513
Service revenue                             1,650                  -                   -               -           1,451        3,101
Service cost                                  25                 15                  15                -            161          216
Interest income                               13                   -                   -               -               -          13


Balance sheet
Accrued income                              1,342                 2                   1                -             96         1,441
Receivables                                  480                  11                   -               -            371          862
Accrued costs                                   -                 1                    -               -               -           1
Payables                                       3                  2                   11               -               -          16
Loan                                            -                  -                   -               -               -            -


related party transactions 2010                                                                                            Total 2010
Profit and loss
Trade related revenues                       501                  15                  6              12                -         533
Service revenue                             2,873                24 –                  -            131             564        3,544
Service cost                                  48                 15                  15              60                -         137
Interest income                                 -                  -                   -               -               -            -


Balance sheet
Accrued income                              1,648                 2                   1              43                -        1,693




                                                                                                                                             Financial Statements
Receivables                                 1,227                 11                  1                -               -        1,238
Accrued costs                                860                  1                    -               -               -         861
Payables                                        -                  -                  9                -               -           9
Bad-debt provision                           633                   -                   -               -               -         633
Loan                                            -                  -                   -               -               -            -



                                                                                                                                        68
TenneT Holding B.V. is a 56.05% shareholder of APX-ENDEX Holding B.V.             Other related parties are transactions with other subsidiaries of shareholders.
APX-ENDEX provides services to TenneT subsidiaries and TenneT joint ventures.     In 2010 this is BritNed Development Ltd., a subsidiary of TenneT Holding B.V.
N.V. Nederlandse Gasunie is 20.88% shareholder of APX-ENDEX Holding B.V.          Additionally, APX-ENDEX has cleared transactions with TenneT and Elia System
APX-ENDEX provides services to Gasunie subsidiaries. Fluxys N.V. is 3.07%         Operator S.A. in relation to operating the market coupling. APX-ENDEX
shareholder of APX-ENDEX Holding B.V. APX-ENDEX provides services to              has cleared EUR 126 million of energy sales and EUR 122 million of energy
Fluxys N.V. and its subsidiaries. Elia System Operator S.A is a 20% shareholder   purchases by TenneT (in 2009: EUR 105 million of energy sales and EUR 108
of APX-ENDEX. APX-ENDEX provides services to Elia System Operator S.A.            million of energy purchases). APX-ENDEX has cleared EUR 76 million of
All related party transactions are carried out on an arms-length principle.       energy sales and EUR 81 million of energy purchases by Elia.




                                                                                                                                                                         Financial Statements
                                                                                                                                                                    69
APX-ENDEX Holding B.V. balance sheet as at 31 December 2010
before profit appropriation
(EUR ’000)


Assets                                               ref.              31 December 2010             31 December 2009


Non-current assets


Intangible assets                                      34     18,796                       12,016
Property, plant and equipment                          35      1,205                         421
Financial assets                                       36     40,294                       21,595
Deferred tax assets                                             109                             -
                                                                                 60,404                       34,032


Current assets


Trade debtors                                           9      1,693                        1,072
Other receivables                                      37      3,311                        3,628
Prepayments and accrued income                                 1,426                        2,175
Short-term bank deposits                               12          -                      116,500
Carbon certificates                                                -                        9,066
Collateral in cash                                     38          -                      227,425
Cash and cash equivalents                                       403                         2,371
                                                                                  6,833                      362,237


                                                                                 67,237                      396,269




                                                                                                                            Financial Statements
                                                                                                                       70
(EUR ’000)


Liabilities                       ref.             31 December 2010              31 December 2009


Equity


Share capital                      39     1,302                         1,042
Share premium                      39    20,641                        19,802
Foreign currency reserve           39    3,560 –                       3,897 –
Revaluation of financial assets    39         -                        1,600
Retained earnings                  39    13,188                        11,588
Unappropriated result              39    3,004                              -
                                                             34,575                        30,135
Non-current liabilities


Deferred income tax liabilities    16     1,133                         1,139
                                                              1,133                         1,139
Current liabilities


Trade creditors                            718                           725
Other liabilities                          934                          2,185
Accruals and deferred income              1,296                         1,078
Borrowing                          20    28,581                       124,516
Liabilities from collateral        38         -                       227,425
Carbon certificates                           -                         9,066




                                                                                                         Financial Statements
                                                             31,529                       364,995


                                                             67,237                       396,269




                                                                                                    71
APX-ENDEX Holding B.V. profit and loss account 2010
EUR ‘000



                                                       ref.            2010                     2009
Revenues                                                 40                   4,374                    16,658
Other income                                             22                       -                     2,410


operating expenses
Personnel expenses                                       41    2,350                    6,689
Amortisation and depreciation                         34, 35    385                      503
Impairment charges                                    34, 35       -                        -
Other operating expenses                                 42    3,344                    7,220
                                                                              6,079                    14,412


operating result                                                              1,705 –                  4,656


Financial income and expenses
Financial income                                         43     131                     6,029
Financial expenses                                       43     291                     5,840
                                                                                160 –                    189


result before taxation                                                        1,865 –                  4,845


Income tax                                               44                    468 –                     621


Net result after taxation                                                     1,397 –                  4,224




                                                                                                                     Financial Statements
Result from group companies                                                   4,401                       28


Net income                                                                    3,004                    4,252




                                                                                                                72
Notes to the company financial statements


 32. General notes                                                                33. Directors’ report
Pursuant to the exemption provided by the Dutch Civil Code Book 2, part 9,        Reference is made to the directors’ report on pages 18 to 25.
article 2:362 paragraph 8, the principles of valuation and determination of the
result for the corporate annual accounts and the consolidated annual accounts
are the same. Subsidiaries are valued on the same principles as the parent.


There have been significant changes to the profit and loss account and balance
sheet as compared to 2009 due to the group legal restructuring that took place
in 2010. Refer to note 2.2 for full details.


For the principles of valuation of assets and liabilities and for the deter-
mination of the result, reference is made to notes 1 and 2 of the consoli-
dated financial statements.




                                                                                                                                                       Financial Statements
                                                                                                                                                  73
 34. Intangible assets
The net carrying amount of the intangible assets can be specified as follows:




(EUR ’000)


                                                Goodwill Dutch spot               Goodwill   Goodwill        Technical
Intangible assets                                  market activities            APX Gas UK    ENDEX     Infrastructure    Total 2009
Acquisition or production costs                                 6,449                1,721      5,504           4,403         18,077
Accumulated impairment and amortisation                         2,002                    -          -           4,037          6,039
Net book value as at 1 January                                  4,447                1,721      5,504             366        12,038


Additions                                                            -                   -          -             162           162
Acquisition expenses                                                 -                   -          -                              -
Amortisation                                                         -                   -          -             307 –         307 –
Impairment charges                                                   -                   -          -                -
Exchange rate differences                                            -                 123          -                -          123
Book value as at 31 December                                    4,447                1,844      5,504             221        12,016


Acquisition or production costs                                 6,449                1,844      5,504           4,565        18,362
Accumulated impairment and amortisation                         2,002                    -          -           4,344         6,346
Net book value as at 31 December                                4,447                1,844      5,504             221        12,016




                                                                                                                                             Financial Statements
                                                                                                                                        74
(EUR ’000)


                                          Goodwill Dutch spot      Goodwill   Goodwill        Technical    Goodwill   Assets under
Intangible assets                            market activities   APX Gas UK    ENDEX     Infrastructure     Belpex    construction   Total 2010
Acquisition or production costs                         6,449         1,844      5,504           4,565            -              -      18,362
Accumulated impairment and amortisation                 2,002             -          -           4,344            -              -       6,346
Net book value as at 1 January                          4,447         1,844      5,504             221            -              -      12,016


Additions                                                    -            -          -                -           -              -            -
Acquisition or product expenses                              -            -          -                -       6,779            60        6,839
Amortisation                                                 -            -          -             118 –          -              -         118 –
Impairment charges                                           -            -          -                -           -              -            -
Exchange rate differences                                    -           59          -                -           -              -          59
Book value as at 31 December                            4,447         1,903      5,504             103        6,779            60       18,796


Acquisition or production costs                         6,449         1,903      5,504           4,565        6,779            60       25,260
Accumulated impairment and amortisation                 2,002             -          -           4,462            -              -       6,464
Net book value as at 31 December                        4,447         1,903      5,504             103        6,779            60       18,796



34.1. Goodwill




                                                                                                                                                        Financial Statements
Reference is made to note 5.1.


34.2. Technical infrastructure
Reference is made to note 5.4.




                                                                                                                                                   75
35. Property, plant and equipment
The net carrying amount of property, plant and equipment can be specified
as follows:

                                                                                        Fixtures     Assets under
Property, plant and equipment (EUR ’000)                                Hardware     and fittings    construction   Total 2009
Acquisition or production costs                                              906             382                -        1,288
Accumulated impairment and depreciation                                      689             372                -        1,061
Net book value as at 1 January                                               217              10                -         227


Additions                                                                    370              21                -         391
Depreciaton                                                                  188 –             9–               -         197 –
Book value as at 31 December                                                 399              22                -         421


Acquisition or production costs                                             1,276            403                -        1,679
Accumulated impairment and depreciation                                      877             381                -        1,258
Net book value as at 31 December                                             399              22                -         421



Property, plant and equipment (EUR ’000)                                                                            Total 2010
Acquisition or production costs                                             1,276            403                -        1,679
Accumulated impairment and depreciation                                      877             381                -        1,258
Net book value as at 1 January                                               399              22                -         421


Additions                                                                    521                -            529         1,050
Depreciaton                                                                  255 –            12 –              -         267 –
Book value as at 31 December                                                 665              10             529        1,205




                                                                                                                                       Financial Statements
Acquisition or production costs                                             1,797            403             529         2,729
Accumulated impairment and depreciation                                     1,132            393                -        1,525
Net book value as at 31 December                                             665              10             529        1,205


Reference is made to note 6.



                                                                                                                                  76
36. Financial assets



                                                                             Investment in        Loans to           other
Financial assets (EUR ’000)                                                    subsidiaries    subsidiaries    investments     Total 2009
Book value as at 1 January                                                          28,127           1,368            900         30,395
Loan repayment                                                                            -               -              -              -
Dividends received                                                                  10,634 –              -              -        10,634 –
Acquisition                                                                               -               -              -              -
Demergers as part of corporate restructuring                                              -               -              -              -
Fair value changes through profit and loss                                                -               -          1,000         1,000
Result from group companies                                                             28                -              -            28
Exchange rate differences                                                              806                -              -           806
Book value as at 31 December                                                        18,327           1,368           1,900        21,595




Financial assets (EUR ’000)                                                                                                    Total 2010
Book value as at 1 January                                                          18,327           1,368           1,900         21,595
Loan repayment                                                                            -          1,368 –             -              -
Dividends received                                                                   5,699 –              -              -          5,699 –
Acquisition                                                                         12,222                -          1,900 –            -
Demergers as part of corporate restructuring                                         8,750                -              -              -
Conversion of loan to share premium                                                  2,018                -              -              -
Fair value changes through profit and loss                                                -               -              -              -
Result from group companies                                                          4,401                -              -          4,401




                                                                                                                                                   Financial Statements
Exchange rate differences                                                              275                -              -           275
Book value as at 31 December                                                        40,294                -              -        40,294


The subordinated loan to APX Commodities Ltd. of EUR 1.4 million has been
repaid during 2010. The other investment redemption relates to the acquisition
of the remaining 90% of Belpex S.A. now classifying as a subsidiary.

                                                                                                                                              77
37. Other receivables                                        The carrying values of the other receivable balances are equal to the fair
                                                             value of these balances.


other receivables (EUR ’000)                 2010    2009
Amounts due from related parties                 -      12    38. Collateral in cash
Amounts due from APX-ENDEX group companies    500      131
Other receivables                               7       7    As a result of the legal restructure carried out in 2010, the clearing activities
VAT                                           239    2,356   of APX-ENDEX Holding B.V. have been transferred to APX-ENDEX Clearing
Corporate tax                                2,566   1,122   B.V. As a result APX-ENDEX Holding B.V. no longer holds collateral from
Balance as at 31 December                    3,311   3,628   trading members.




                                                                                                                                                      Financial Statements
                                                                                                                                                 78
39. Equity

(EUR ’000)
                                                          Attributable to the equity holders of the company
                                 Share       Share            Foreign        revaluation of      retained         Unappro-
                                capital   premium     currency reserve      financial assets     earnings     priated result    Total 2009
Balance as at 1 January          1,042      19,802              4,826 –                 600        13,236                  -       29,854


Result of the year                    -          -                   -                1,000              -            3,252         4,252
Dividend                              -          -                   -                     -        4,900 –                -        4,900 –
Exchange rate differences             -          -                929                      -             -                 -          929
Total recognised income               -          -                929                 1,000         4,900 –           3,252           281


Balance as at 31 December        1,042      19,802              3,897 –               1,600         8,336             3,252        26,883



                                                          Attributable to the equity holders of the company
                                 Share       Share            Foreign        revaluation of      retained         Unappro-
                                capital   premium     currency reserve      financial assets     earnings     priated result    Total 2010
Balance as at 1 January          1,042      19,802              3,897 –               1,600         8,336             3,252        30,135


Transfer to retained earnings         -          -                   -                     -        3,252             3,252 –            -
Result of the year                    -          -                   -                     -                          3,004         3,004
Acquisition Belpex                    -          -                   -                1,600 –       1,600                  -             -
Dividend                              -    20,000 –                  -                     -             -                 -       20,000 –
Share issue                        260      20,839                   -                     -             -                 -       21,099
Exchange rate differences             -          -                337                      -             -                 -          337




                                                                                                                                                   Financial Statements
Total recognised income            260        839                 337                 1,600 –       4,852               248 –       4,440


Balance as at 31 December        1,302     20,641               3,560 –                    -       13,188             3,004        34,575




                                                                                                                                              79
Share capital                                                                       40. Borrowings
APX-ENDEX Holding B.V. has an authorised capital of EUR 3 million divided into
three million shares of EUR 1 each. In 2010, APX-ENDEX has issued an additional    (EUR ’000)
260,506 shares. The total number of shares issued and paid-up is 1,302,506.        Borrowings APX-ENDEX Holding B.V.                         2010                2009
                                                                                   Non-current                                                    -                   -
Share premium                                                                      Loans                                                          -                   -
The share premium reflects the difference between the nominal value of the                                                                        -                   -
shares and the price paid for the shares at the moment of issuing. In 2010,        Current
APX Holding B.V. has issued an additional 260,506 shares with a share premium      Bank overdrafts                                         10,831              124,516
of EUR 20,839,494.                                                                 Loans with APX-ENDEX group companies                    12,750                     -
                                                                                   Loans                                                    5,000                     -
Foreign currency reserve
The net asset values of the foreign currency (UK) operations including good-       Total borrowings                                        28,581             124,516
will are translated to a Euro value. Currency translations are shown as equity
movement. The foreign currency reserve relates to the difference resulting         All borrowing is denominated in Euros. The group has EUR 16,2 million of
from translation of foreign currency participating interests in the UK including   undrawn borrowing facilities, all floating rate and expiring within one year.
goodwill. The foreign currency reserve is a non-distributable reserve.             All borrowing has an exposure to interest changes of 6 months or less. The bank
                                                                                   overdraft facility is a group facility, with all entities able to drawn upon it.
Retained earnings                                                                  Of the loans EUR 12,750k is from loan agreements with group companies.
Other reserves comprises the company’s cumulative distributable reserves.
                                                                                   The large reduction in bank overdrafts from 2009 is due to the restructuring
Unappropriated result                                                              or banking arrangements. In 2009 a notional balancing pool was used to
The unappropriated result comprises the current year result.                       place cash provided as security in short-term bank deposits. This is no longer
                                                                                   the case in 2010 per June 2010.
Dividend
A dividend of EUR 20 million was declared and paid during 2010 (2009:nil)          The fair value of current borrowings equals their carrying amount, as the
prior to the share issue.                                                          impact of discounting is not significant.




                                                                                                                                                                               Financial Statements
                                                                                                                                                                          80
41. Revenues                                                                             43. Other operating expenses

revenues (EUR ’000)                                           2010          2009        other operating expenses (EUR ’000)                         2010         2009
Transaction fee                                                    -        4,646       Housing                                                      878          602
Membership and entrance fee                                        -        1,690       IT (trade system)                                           3,018        2,222
Service income                                                4,374         3,600       Product development                                             -        1,024
Services to APX group companies                                    -        4,809       Consulting and advisory services                            1,858        1,252
Interest income from collateral                                    -         1,913      Marketing and communication                                  790          665
Total                                                         4,374       16,658        Insurance                                                    247           198
                                                                                        Travel expenses                                              361          290
In 2010 the clearing and energy trading activities of APX-ENDEX Holding                 Provision for receivables                                    673             -
B.V. were transferred to APX-ENDEX Clearing B.V. and APX-ENDEX Power                    Project costs                                                   -            -
B.V. respectively. As a result there is no transaction fee or collateral interest       Miscellaneous expenses                                       461          966
revenue in 2010.                                                                        Recharged costs to other APX-ENDEX group companies          4,942 –          -
                                                                                        Total                                                      3,344         7,220


42. Personnel expenses                                                                  Reference is made to note 23.


Personnel expenses (EUR ’000)                                 2010          2009
Wages and salaries                                            3,713         3,956       44. Financial income and expenses
Pension costs                                                   459           442
Other social security costs                                     234           243       Financial income (EUR ’000)                                 2010         2009
Other employee expenses                                         625           536       Interest balancing compensation                                 -        5,531
Temporary staff                                               1,574         1,512       Interest income from intra group loans                         13          55
Recharged staff to other APX-ENDEX companies                  4,254 –               -   Other financial income                                        118           24
Total                                                        2,350         6,689        Foreign exchange gains                                          -          419
                                                                                        Total                                                        131         6,029




                                                                                                                                                                              Financial Statements
Reference is made to note 22.
                                                                                        The large decrease in amounts shown is due to the transfer of clearing
                                                                                        activities to APX-ENDEX Clearing B.V. As a result APX-ENDEX Holding B.V.
                                                                                        does not hold cash collateral.




                                                                                                                                                                         81
Financial expenses (EUR ’000)                             2010         2009        46. Commitments not included in the balance sheet
Interest expenses from inter group loans                     80             55     APX-ENDEX Holding B.V. leases offices under operating lease agreements
Interest expenses from interest pooling                        -       5,531       and has signed a new lease in 2010. The lease terms are between 1 and 6 years.
Interest expenses for security provided                        -            99     The future aggregate minimum lease payments under non-cancellable
Other interest expenses                                     209            155     operating leases are as follows:
Foreign exchange loss                                         2              -
Total                                                       291        5,840       Lease payments office space (EUR ’000)              after 2010     after 2009
                                                                                   No later than 1 year                                        373            586
                                                                                   Later than 1 year and no later than 5 years               1,627              -
 45. Income tax                                                                    Later than 5 years                                           34              -
                                                                                                                                            2,034            586
Current tax (EUR ’000)                                    2010         2009
Current income tax                                          484 –          621     APX-ENDEX Holding B.V. has provided a number of bank guarantees,
Changes in deferred tax assets                               23              -     totalling EUR 3.6 million in connection with the office lease, market coupling
Changes in deferred liabilities                               6              -     obligations and adherence to the Belgian and Dutch power net code.
Total                                                      468 –           621


The tax calculated on the profit before tax differs from the theoretical           47. Subsequent events
amount that would be calculated using the weighted average tax rate                Reference is made to note 27.
applicable. The schedule below shows the differences.


Income tax calculation (EUR ’000)                         2010         2009
Profit before tax                                         1,865 –      4,844


Weighted theoretical average rate                        25.5%         25.5%
Theoretical income tax charge                               476        1,235




                                                                                                                                                                         Financial Statements
Change in tax rate                                            5–             -
Non taxable income and expenses                                -           614 –
Tax charges previous years                                   13              -
Actual income tax charge                                   468 –           621




                                                                                                                                                                    82
48. Related party transactions
Reference is made to note 30 for related party transactions.


Amsterdam, 23 March 2011
APX-ENDEX Holding B.V.


Management Board
Bert den Ouden (CEO), Lucas Schmeddes (CFO), Pieter Schuurs (COO),
Catherine Vandenborre.


Supervisory Board
J.B.M. ten Berge (Chairman), H.A.T. Chin-Sue, J.M. Kroon, G.H. de Marez
Oyens, J.R. Steinhauser, R. de Jong, E. Bosman (resigned 13 October 2010),
D. Dobbeni (since 13 October 2010).




                                                                                  Financial Statements
                                                                             83
Other Information
Article 36 of the company’s
Articles of Association


Profits shall be at the disposal of the
General Meeting of Shareholders
for distribution of dividend or in order
to be added to the reserves or for
such other purposes within the
company’s objectives as the meeting
will decide. In calculating the amount
of profit to be distributed in respect
of each share, only the amount of the
mandatory payments on the nominal
shares shall be taken into account.


An interim dividend of EUR 20 million
was declared and paid out to the
company’s Shareholders in October
2010. As this dividend was already
well in excess of the 2010 result,
no year end dividend payment is




                                                Financial Statements
recommended in relation to the
financial year 2010 (2009:nil). It is
proposed that the current year result
will be added to the company’s
retained earnings.



                                           85
Auditor’s report
  To: the General Meeting of Shareholders of APX-ENDEX Holding B.V.

  Report on the financial                 sheet as at 31 December 2010,          board is responsible for such internal   dures to obtain audit evidence
  statements                              the company profit and loss            control as it determines is necessary    about the amounts and disclosures
  We have audited the accompanying        account for the year then ended        to enable the preparation of the         in the financial statements.
  financial statements 2010 of            and the notes, comprising a summary    financial statements that are free       The procedures selected depend
  APX-ENDEX Holding B.V., Amsterdam.      of accounting policies and other       from material misstatement,              on the auditor’s judgment, including
  The financial statements include the    explanatory information.               whether due to fraud or error.           the assessment of the risks of material
  consolidated financial statements                                                                                       misstatement of the financial state-
  and the company financial statements.   Management Board’s responsibility      Auditor’s responsibility                 ments, whether due to fraud or error.
  The consolidated financial statements   The Management Board is responsible    Our responsibility is to express an      In making those risk assessments,
  comprise the consolidated balance       for the preparation and fair presen-   opinion on these financial statements    the auditor considers internal control
  sheet as at 31 December 2010, the       tation of these financial statements   based on our audit. We conducted         relevant to the company’s preparation
  consolidated profit and loss account,   in accordance with International       our audit in accordance with Dutch       and fair presentation of the financial
  the statements of comprehensive         Financial Reporting Standards as       law, including the Dutch Standards       statements in order to design audit
  income, changes in equity and cash      adopted by the European Union          on Auditing. This requires that we       procedures that are appropriate in
  flows for the year then ended and       and with Part 9 of Book 2 of the       comply with ethical requirements         the circumstances, but not for the
  the notes, comprising a summary of      Dutch Civil Code, and for the pre-     and plan and perform the audit to        purpose of expressing an opinion
  significant accounting policies and     paration of the Executive Directors’   obtain reasonable assurance about        on the effectiveness of the company’s
  other explanatory information.          report in accordance with Part 9       whether the financial statements         internal control. An audit also includes




                                                                                                                                                                          Financial Statements
  The company financial statements        of Book 2 of the Dutch Civil Code.     are free from material misstatement.     evaluating the appropriateness of
  comprise the company balance            Furthermore, the management            An audit involves performing proce-      accounting policies used and the




                                                                                                                                                                     86
reasonableness of accounting            European Union and with Part 9 of        Managing Directors’ report, to the
estimates made by the management        Book 2 of the Dutch Civil Code.          extent we can assess, has been
board, as well as evaluating the                                                 prepared in accordance with Part 9
overall presentation of the financial   Opinion with respect to the              of Book 2 of this Code, and whether
statements. We believe that the         company financial statements             the information as required under
audit evidence we have obtained is      In our opinion, the company financial    Section 2: 392 sub 1 at b-h has been
sufficient and appropriate to provide   statements give a true and fair view     annexed. Further we report that the
a basis for our audit opinion.          of the financial position of APX-ENDEX   Managing Directors’ report, to the
                                        Holding B.V. as at 31 December 2010,     extent we can assess, is consistent
Opinion with respect to the             and of its result for the year then      with the financial statements as
consolidated financial statements       ended in accordance with Part 9          required by Section 2: 391 sub 4
In our opinion, the consolidated        of Book 2 of the Dutch Civil Code.       of the Dutch Civil Code.
financial statements give a true and
fair view of the financial position     Report on other legal and                Utrecht, 23 March 2011
of APX-ENDEX Holding B.V. as at         regulatory requirements                  PricewaterhouseCoopers
31 December 2010, and of its result     Pursuant to the legal requirement        Accountants N.V.
and its cash flows for the year then    under Section 2: 393 sub 5 at e and
ended in accordance with Inter-         f of the Dutch Civil Code, we have       Drs. C.J.A.M. Romme RA




                                                                                                                             Financial Statements
national Financial Reporting            no deficiencies to report as a result
Standards as adopted by the             of our examination whether the




                                                                                                                        87
Supervisory Board
Mr J.B.M. ten Berge
(Chairman)
Mr ten Berge joined the
Supervisory Board on 6 July 2007.
His term of office expires on
6 July 2011.
Born: 15 August 1951
Nationality: Dutch


Current position(s):
• Secretary General EURELECTRIC
• Member of the Board of the
 Association for Catholic Education
• Member of the Board of VGB Essen




                                           Supervisory Board
                                      89
Mr H.A.T. Chin-Sue                     Mr J.M. Kroon                            Mr G.H. de Marez Oyens                Mr J.R. Steinhauser
Mr Chin-Sue joined the Supervisory     Mr Kroon joined the Supervisory          Mr de Marez Oyens joined the          Mr Steinhauser joined the
Board on 1 January 2006. His term      Board on 13 February 2003. His term      Supervisory Board on 30 August        Supervisory Board on 30 August
of office expires on 1 January 2014.   of office expires on 13 February 2011.   2001. His term of office expires on   2001. His term of office expires on
Born: 8 May 1953                       Born: 21 June 1957                       30 August 2013.                       30 August 2013.
Nationality: Dutch                     Nationality: Dutch                       Born: 13 April 1941                   Born: 20 September 1944
                                                                                Nationality: Dutch                    Nationality: Dutch


Current position(s):                   Current Position(s):                     Current position(s):                  Current position(s):
• Member of the Executive Board        • CEO of TenneT Holding B.V.             • Mediator and consultant             • Director of Jan Steinhauser
 and CFO N.V. Nederlandse Gasunie      • Chairman of the                                                                Associates B.V.
  M
• ember of the Supervisory Board      Supervisory Board Novec B.V.                                                     M
                                                                                                                      •  ember of the board of the
 Holland Metrology Group               • Chairman of the Supervisory                                                    Amsterdam Institute of Finance
  M
• ember of the Board of               Board TenneT TSO GmbH                                                            M
                                                                                                                      •  ember of the Visitatie-
 Governors (EMFC Rijksuniversiteit     • Member Comité d’Administration                                                 Commissie Pension Funds
 Groningen)                             Powernext S.A.                                                                   T
                                                                                                                      •  reasurer of the Foundation
                                                                                                                        Dutch Art Works
                                       Other position(s):                                                                C
                                                                                                                      •  hairman of the Foundation
                                       • Member of the Supervisory Board                                                Dansersfonds ‘79
                                        Havenbedrijf Rotterdam N.V.




                                                                                                                                                                 Supervisory Board
                                        (Port of Rotterdam)
                                       • Member of the Supervisory Board
                                        Diamond Tools Group N.V.
                                       • Member of the Supervisory Board
                                        HTM Personenvervoer N.V.

                                                                                                                                                            90
Mr R. de Jong                           Mr D. Dobbeni
Mr de Jong joined the Supervisory       Mr Dobbeni joined the Supervisory
Board on 28 October 2008. His term      Board on 13 October 2010. His term
of office expires on 28 October 2012.   of office expires on 13 October 2014.
Born: 24 September 1948                 Born: 13 April 1952
Nationality: Dutch                      Nationality: Belgian



Current position(s):                    Current position(s):
   M
•  ember of the Supervisory              C
                                        •  EO and President of the
  Board of “Waarborgfonds voor            Executive Committee of Elia N.V.
  de Zorgsector”                           P
                                        •  resident of the European
   M
•  ember of the Supervisory             Network of Transmission
  Board of Enexis Holding N.V.,           System Operators for Electricity
  Member of the Audit Committee           (ENTSO-E)
   M
•  ember of the Supervisory              P
                                        •  resident of Synergrid
  Board of USG People N.V. and             C
                                        •  hairman of the Board
  the Chairman of the Audit               of Directors of Eurogrid
  Committee                               International
                                        • Chairman of the Board of




                                                                                     Supervisory Board
                                          Directors of 50Hertz




                                                                                91
Colophon

  Text                                                                  APX-ENDEX Holding B.V. is a private limited liability company and has its
  APX-ENDEX Holding B.V.                                                seat in Amsterdam, the Netherlands and is registered with the Trade Registry
                                                                        of the Chamber of Commerce and Industry under number 34153887.
  Design
  Headline integrated communication B.V. – Amsterdam, the Netherlands   APX Commodities Ltd., APX-ENDEX Power B.V., APX-ENDEX Gas B.V.,
                                                                        APX-ENDEX Derivatives B.V., APX-ENDEX Clearing B.V. and Belpex S.A.
  Print                                                                 are 100% subsidiary companies of APX-ENDEX Holding B.V. APX-ENDEX
  Coers en Roest ontwerpers bno | drukkers – Arnhem, the Netherlands    Derivatives B.V. is regulated by the AFM, the Netherlands Authority for the
                                                                        Financial Markets.
  Photography
  Peter Molle                                                           APX Commodities Ltd. is authorised and regulated by the Financial Services
                                                                        Authority (FSA).
  Publication
  APX-ENDEX Holding B.V.                                                APX-ENDEX offices are located in Amsterdam, Brussels, London
  Strawinskylaan 729                                                    and Nottingham.
  1077 XX Amsterdam
  The Netherlands                                                       EuroLight ® is a registered trademark by APX-ENDEX Holding B.V.




                                                                                                                                                            Colophobn
                                                                                                                                                       92

								
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