SWX Swiss Exchange Issues Reprimand Against Card Guard AG

The SWX Swiss Exchange has pronounced a reprimand with related publication against Card Guard AG, Neuhausen am Rheinfall, for violation of the provisions of US GAAP as well as those of the Listing Rules. The SWX reprimand pertains to the company’s incomplete segment reporting and its failure to produce a statement of changes in shareholders’ equity.

The 2005 semi-annual report of Card Guard AG (Card Guard) was not in full compliance with the provisions of US Generally Accepted Accounting Principles (US GAAP) and those of the Listing Rules. Apart from meeting the requirements laid down in APB 28 "Interim Financial Reporting", companies applying US GAAP have also been obligated since 1 January 2005 to observe more extensive SWX disclosure rules in their interim financial reports. In this connection, Card Guard disclosed neither a complete segment reporting nor a statement of changes in shareholders’ equity.

Through the lack of disclosure of detailed segment results, investors were deprived of key information on the performance of the company’s individual business segments and the future development of Card Guard. Moreover, Card Guard failed to produce a statement of changes in shareholders’ equity, thereby depriving investors of significant information on the business events recorded in shareholders’ equity. In the meantime, the company has published the missing information on its Website.

The inadequate disclosures in Card Guard’s 2005 semi-annual report represent a breach of US GAAP and the provisions of the Listing Rules. For that reason, the Executive Committee of the SWX Admission Board has pronounced a reprimand with related publication against Card Guard.

Periodic financial reporting in compliance with applicable accounting standards represents an integral part of the information that contributes to transparent trading as stipulated by the Stock Exchange Act and the Listing Rules. One of the regulatory tasks of SWX is to ensure enforcement of the transparency rules imposed on issuers.

Information on accounting standards can be accessed at: http://www.swx.com/admission/being_public/accounting_en.html

Previous sanctions issued by SWX with regard to accounting can be accessed at: http://www.swx.com/admission/being_public/sanctions/accounting_en.html