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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-K/A

(Amendment No. 1)



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|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended: August 31, 2006

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from              to

Commission file number: 000-51099



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FCStone Group, Inc.

(Exact name of Registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Iowa                                                           |  | 42-1091210                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|2829 Westown Parkway, Suite 100, West Des Moines, Iowa         |  | 50266                               
|(Address of principal executive office)                        |  | (Zip Code)                          

Registrants telephone number, including area code: (515) 223-3756

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to 12(g) of the Act: Common Stock, no par value



---

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    Yes ̈No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    Yes ̈No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No ̈

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ̈

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer (as defined in Exchange Act Rule 12b-2).



|                         |  |                    |  |                         
|------------------------ |  | ------------------ |  | ------------------------
|Large accelerated filer ̈ |  | Accelerated filer ̈ |  | Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act).    Yes ̈No  x

There is currently no public market for the Registrants securities. As of November 28, 2006, the Registrant had 4,845,736 shares of common
stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None



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EXPLANATORY NOTE

This Annual Report on Form 10-K/A (Form 10-K/A) is being filed as Amendment No. 1 to our Annual Report on Form 10-K for the fiscal year ended August 31, 2006, which was filed with the Securities and
Exchange Commission on November 29, 2006 (the Original Filing). This Form 10-K/A is a technical amendment to add the conformed signature of our independent registered public accounting firm to their audit reports which appear in Items 8
and 15. The conformed signatures were previously inadvertently omitted from the electronically filed document. The additions of these conformed signatures are the only changes to these Items 8 and 15, which are filed herein in their entirety in
accordance with the SECs rules and regulations.

The following sections in this report have been amended as a result of the
restatement:

Part IIItem 8. Financial Statements and Supplementary Data; and

Part IVItem 15. Exhibits and Financial Statement Schedules.

This Form 10-K/A only amends the Items described above, and we have not modified or updated other disclosures presented in our Original Filing.
Accordingly, this Amendment No. 1 does not reflect events occurring after the filing of our Original Filing and does not modify or update those disclosures affected by subsequent events, except as specifically referenced herein. Information not
affected by this amendment is unchanged and reflects the disclosures made at the time of the Original Filing on November 29, 2006.



1



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PART II

Item 8. Financial Statements and Supplementary Data

Our audited consolidated financial statements are filed under this
Item, beginning on page F-1 of this Report. Our financial statement schedules are filed under Item 15 Exhibits and Financial Statement Schedules.



2



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PART IV

Item 15. Exhibits and Financial Statement Schedules.



|    |  |                                                                                                                                                                                                    |  |                                                                                                                                                  
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Financial Statements and Schedules                                                                                                                                                                
|    |  |                                                                                                                                                                                                   
|    |  | (1)                                                                                                                                                                                                |  | The following financial statements are filed as a part of this report:                                                                           
|    |  |                                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                    |  | Report of Independent Registered Public Accounting Firm                                                                                          
|    |  |                                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                    |  | Consolidated Statements of Financial Condition as of August 31, 2005 and August 31, 2006                                                         
|    |  |                                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                    |  | Consolidated Statements of Operations for the years ended August 31, 2004, August 31, 2005 and August 31, 2006                                   
|    |  |                                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                    |  | Consolidated Statements of Stockholders Equity and Comprehensive Income for the years ended August 31, 2004, August 31, 2005 and August 31, 2006
|    |  |                                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                    |  | Consolidated Statements of Cash Flows for the years ended August 31, 2004, August 31, 2005 and August 31, 2006                                   
|    |  |                                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                    |  | Notes to Consolidated Financial Statements                                                                                                       
|    |  |                                                                                                                                                                                                   
|    |  | (2)                                                                                                                                                                                                |  | The following financial statement schedules are filed as a part of this report:                                                                  
|    |  |                                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                    |  | Schedule IParent company condensed financial statements                                                                                         
|    |  |                                                                                                                                                                                                   
|    |  |                                                                                                                                                                                                    |  | Schedule IIValuation and qualifying accounts                                                                                                    
|    | 
|(b) |  | Exhibits                                                                                                                                                                                          
|    | 
|    |  | The exhibits listed in the Exhibit Index immediately preceding the exhibits are filed as part of this amended Annual Report on Form 10-K/A or
incorporated herein by reference as indicated below.



3



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                 |  |                                                                        
|---------------- |  | -----------------------------------------------------------------------
|                 |  | FCSTONE GROUP, INC.                                                    
|                 | 
|February 5, 2007 |  | /S/    PAUL G.
ANDERSON                                                
|Date             |  | Paul G. Anderson, Chief Executive Officer (Principal Executive Officer)



4



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INDEX TO COMPANY FINANCIAL STATEMENTS



|                                                                                                                            |  |    
|--------------------------------------------------------------------------------------------------------------------------- |  | ---
|FCStone Group, Inc. and Subsidiaries                                                                                        |  |    
|                                                                                                                            | 
|Audited Consolidated Financial Statements                                                                                   |  |    
|                                                                                                                            | 
|Report of Independent Registered Public Accounting Firm                                                                     |  | F-1
|                                                                                                                            | 
|Consolidated Statements of Financial Condition as of August 31, 2005 and 2006                                               |  | F-2
|                                                                                                                            | 
|Consolidated Statements of Operations for the Years Ended August 31, 2004, 2005 and 2006                                    |  | F-3
|                                                                                                                            | 
|Consolidated Statements of Stockholders Equity and Comprehensive Income for the Years Ended August 31, 2004, 2005 and 2006 |  | F-4
|                                                                                                                            | 
|Consolidated Statements of Cash Flows for the Years Ended August 31, 2004, 2005 and 2006                                    |  | F-5
|                                                                                                                            | 
|Notes to Consolidated Financial Statements                                                                                  |  | F-6



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Report of Independent Registered Public Accounting Firm

The Board of Directors

FCStone Group, Inc.:

We have audited the accompanying
consolidated statements of financial condition of FCStone Group, Inc. and subsidiaries (the Company) as of August 31, 2006 and 2005 and the related consolidated statements of operations, stockholders equity and comprehensive income, and
cash flows for each of the years in the three-year period ended August 31, 2006. In connection with our audits of the consolidated financial statements, we have also audited the financial statement schedules I and II. These consolidated
financial statements and financial statement schedules are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our
audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of FCStone Group, Inc. and subsidiaries as of August 31, 2006 and 2005 and the results of their operations and their cash flows for each of the years in the three-year
period ended August 31, 2006, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as
a whole, present fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

November 28, 2006

Des Moines, Iowa



F-1



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FCSTONE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except share and per share amounts)



|                                                                                                                                                                               |  |            |         |   |      |   |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------- | ------- | - | ---- | - | --------- | -
|                                                                                                                                                                               |  | August 31, |        
|                                                                                                                                                                               |  | 2005       |         |   | 2006 |  
|ASSETS                                                                                                                                                                         |  |            |         |   |      |   |           |  
|Cash and cash equivalents:                                                                                                                                                     |  |            |         |   |      |   |           |  
|Unrestricted                                                                                                                                                                   |  | $          | 25,045  |   |      | $ | 59,726    |  
|Restricted                                                                                                                                                                     |  |            | 1,410   |   |      |   | 4,010     |  
|Segregated                                                                                                                                                                     |  |            | 10,509  |   |      |   | 14,221    |  
|Commodity deposits and accounts receivable:                                                                                                                                    |  |            |         |   |      |   |           |  
|Commodity exchanges and clearing organizationscustomer segregated, including United States treasury bills and notes of $338,837 in 2005,
$600,609 in 2006                     |  |            | 395,908 |   |      |   | 604,536   |  
|Proprietary commodity accounts                                                                                                                                                 |  |            | 18,028  |   |      |   | 20,133    |  
|Customer regulated accounts in deficit secured by U.S. Treasury bills and notes of $2,786 in 2005 and $26,979 in 2006 included
above                                           |  |            | 6,351   |   |      |   | 29,166    |  
|                                                                                                                                                                               |  |            |         |   |      |   |           |  
|Total commodity deposits and accounts receivable                                                                                                                               |  |            | 420,287 |   |      |   | 653,835   |  
|                                                                                                                                                                               |  |            |         |   |      |   |           |  
|Marketable securities, at fair valueCustomer segregated and other (including other of $376 in 2005 and $378 in 2006)                                                          |  |            | 192,328 |   |      |   | 149,612   |  
|Accounts receivable and advances on grain                                                                                                                                      |  |            | 114,946 |   |      |   | 103,434   |  
|Notes receivable                                                                                                                                                               |  |            | 9,632   |   |      |   | 14,971    |  
|Inventoriesgrain, fertilizer, and fuel                                                                                                                                        |  |            | 14,605  |   |      |   | 26,628    |  
|Exchange memberships and stock, at cost (fair value of $5,871 in 2005, $14,391 in 2006) (note 2)                                                                               |  |            | 1,797   |   |      |   | 6,587     |  
|Furniture, equipment, and improvements, net of accumulated depreciation of $4,676 in 2005 and $4,700 in 2006                                                                   |  |            | 8,206   |   |      |   | 7,386     |  
|Deferred income taxes (note 4)                                                                                                                                                 |  |            | 4,013   |   |      |   | 4,697     |  
|Investments in affiliates                                                                                                                                                      |  |            | 1,726   |   |      |   | 3,540     |  
|Investments in other organizations                                                                                                                                             |  |            | 1,847   |   |      |   | 1,994     |  
|Other assets                                                                                                                                                                   |  |            | 3,233   |   |      |   | 6,566     |  
|                                                                                                                                                                               |  |            |         |   |      |   |           |  
|                                                                                                                                                                               |  | $          | 809,584 |   |      | $ | 1,057,207 |  
|                                                                                                                                                                               |  |            |         |   |      |   |           |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                           |  |            |         |   |      |   |           |  
|Liabilities:                                                                                                                                                                   |  |            |         |   |      |   |           |  
|Checks written in excess of bank balance                                                                                                                                       |  | $          | 4,880   |   |      | $ | 6,436     |  
|Commodity and customer regulated accounts payable                                                                                                                              |  |            | 548,562 |   |      |   | 726,920   |  
|Trade accounts payable and advances                                                                                                                                            |  |            | 134,415 |   |      |   | 169,650   |  
|Accrued expenses                                                                                                                                                               |  |            | 20,764  |   |      |   | 26,876    |  
|Notes payable (note 11)                                                                                                                                                        |  |            | 36,911  |   |      |   | 48,169    |  
|Subordinated debt (note 13)                                                                                                                                                    |  |            | 5,500   |   |      |   | 7,000     |  
|Obligations under capital leases                                                                                                                                               |  |            | 4,125   |   |      |   | 3,575     |  
|                                                                                                                                                                               |  |            |         |   |      |   |           |  
|Total liabilities                                                                                                                                                              |  |            | 755,157 |   |      |   | 988,626   |  
|                                                                                                                                                                               |  |            |         |   |      |   |           |  
|Minority interest (note 1)                                                                                                                                                     |  |            | 4,755   |   |      |   | 3,607     |  
|Redeemable common stock held by Employee Stock Ownership Plan (note 10)                                                                                                        |  |            | 4,487   |   |      |   | 6,079     |  
|                                                                                                                                                                               |  |           
|Stockholders equity (notes 5 and 10):                                                                                                                                         |  |            |         |   |      |   |           |  
|Common stock, no par value, authorized 20,000,000 at August 31, 2005 and 2006, respectively; issued and outstanding 4,828,279 and
4,845,736 shares at August 31, 2005 and 2006 |  |            | 21,524  |   |      |   | 21,747    |  
|Additional paid-in capital                                                                                                                                                     |  |            |        |   |      |   | 120       |  
|Accumulated other comprehensive loss                                                                                                                                           |  |            | (4,555  | ) |      |   | (1,955    | )
|Retained earnings                                                                                                                                                              |  |            | 32,703  |   |      |   | 45,062    |  
|                                                                                                                                                                               |  |            |         |   |      |   |           |  
|                                                                                                                                                                               |  |            | 49,672  |   |      |   | 64,974    |  
|Less maximum cash obligation related to ESOP shares (note 10)                                                                                                                  |  |            | (4,487  | ) |      |   | (6,079    | )
|                                                                                                                                                                               |  |            |         |   |      |   |           |  
|Total stockholders equity                                                                                                                                                     |  |            | 45,185  |   |      |   | 58,895    |  
|                                                                                                                                                                               |  |            |         |   |      |   |           |  
|Commitments and contingencies (notes 9, 12, and 14)                                                                                                                            |  |            |         |   |      |   |           |  
|                                                                                                                                                                               |  |           
|Total liabilities and stockholders equity                                                                                                                                     |  | $          | 809,584 |   |      | $ | 1,057,207 |  
|                                                                                                                                                                               |  |            |         |   |      |   |           |  

See accompanying notes to consolidated financial statements.



F-2



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FCSTONE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)



|                                                             |  |                       |           |      |   |           |      |  |   |           |  
|------------------------------------------------------------ |  | --------------------- | --------- | ---- | - | --------- | ---- |  | - | --------- | -
|                                                             |  | Year Ended August 31, |          
|                                                             |  | 2004                  |           | 2005 |   |           | 2006 | 
|Revenues:                                                    |  |                       |           |      |   |           |      |  |   |           |  
|Commissions and clearing fees                                |  | $                     | 67,594    |      | $ | 76,674    |      |  | $ | 105,622   |  
|Service, consulting and brokerage fees                       |  |                       | 12,008    |      |   | 18,913    |      |  |   | 33,388    |  
|Interest                                                     |  |                       | 3,982     |      |   | 8,177     |      |  |   | 23,174    |  
|Other                                                        |  |                       | 4,521     |      |   | 7,463     |      |  |   | 2,638     |  
|Sales of commodities                                         |  |                       | 1,536,209 |      |   | 1,290,620 |      |  |   | 1,129,983 |  
|                                                             |  |                       |           |      |   |           |      |  |   |           |  
|Total revenues                                               |  |                       | 1,624,314 |      |   | 1,401,847 |      |  |   | 1,294,805 |  
|                                                             |  |                       |           |      |   |           |      |  |   |           |  
|Costs and expenses:                                          |  |                       |           |      |   |           |      |  |   |           |  
|Cost of commodities sold                                     |  |                       | 1,519,221 |      |   | 1,275,094 |      |  |   | 1,112,949 |  
|Employee compensation and broker commissions                 |  |                       | 30,160    |      |   | 32,578    |      |  |   | 44,229    |  
|Pit brokerage and clearing fees                              |  |                       | 26,713    |      |   | 33,141    |      |  |   | 47,613    |  
|Introducing broker commissions                               |  |                       | 10,704    |      |   | 14,459    |      |  |   | 22,826    |  
|Employee benefits and payroll taxes (note 6)                 |  |                       | 7,136     |      |   | 8,044     |      |  |   | 9,801     |  
|Interest                                                     |  |                       | 4,418     |      |   | 3,946     |      |  |   | 5,705     |  
|Depreciation and amortization                                |  |                       | 861       |      |   | 1,551     |      |  |   | 1,674     |  
|Bad debt expense                                             |  |                       | 716       |      |   | 4,077     |      |  |   | 1,909     |  
|Other expenses (note 9)                                      |  |                       | 15,365    |      |   | 18,926    |      |  |   | 23,568    |  
|                                                             |  |                       |           |      |   |           |      |  |   |           |  
|Total costs and expenses                                     |  |                       | 1,615,294 |      |   | 1,391,816 |      |  |   | 1,270,274 |  
|                                                             |  |                       |           |      |   |           |      |  |   |           |  
|Income before income tax expense and minority interest       |  |                       | 9,020     |      |   | 10,031    |      |  |   | 24,531    |  
|Minority interest (note 1)                                   |  |                       | 576       |      |   | (499      | )    |  |   | (226      | )
|                                                             |  |                       |           |      |   |           |      |  |   |           |  
|Income after minority interest and before income tax expense |  |                       | 8,444     |      |   | 10,530    |      |  |   | 24,757    |  
|Income tax expense (note 4)                                  |  |                       | 2,030     |      |   | 3,950     |      |  |   | 9,500     |  
|                                                             |  |                       |           |      |   |           |      |  |   |           |  
|Net income                                                   |  | $                     | 6,414     |      | $ | 6,580     |      |  | $ | 15,257    |  
|                                                             |  |                       |           |      |   |           |      |  |   |           |  
|Basic and diluted shares outstanding                         |  |                       |           |      |   | 4,357     |      |  |   | 4,833     |  
|Basic and diluted earnings per share                         |  |                       |           |      | $ | 1.51      |      |  | $ | 3.16      |  

See accompanying notes to consolidated financial statements.



F-3



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FCSTONE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND
COMPREHENSIVE INCOME

(in thousands, except per share amount)



|                                                                     |  |              |        |         |                |   |         |              |  |   |                            |   |                                      |   |      |                   |  |   |                                                |  |   |                           |   |  |   |        |   |  |   |        |   |  |   |        |  
|-------------------------------------------------------------------- |  | ------------ | ------ | ------- | -------------- | - | ------- | ------------ |  | - | -------------------------- | - | ------------------------------------ | - | ---- | ----------------- |  | - | ---------------------------------------------- |  | - | ------------------------- | - |  | - | ------ | - |  | - | ------ | - |  | - | ------ | -
|                                                                     |  | Common Stock |        |         | PreferredStock |   |         | Common Stock |  |   | Additional Paid In Capital |   | Accumulated Other Comprehensive Loss |   |      | Retained Earnings |  |   | Maximum Cash Obligation Related to ESOP Shares |  |   | TotalStockholders Equity |  
|                                                                     |  |              |        | Class A |                |   | Class B |              |  |   |                            |   |                                     
|Balance at August 31, 2003                                           |  | $            |       |         |                | $ | 14,006  |              |  | $ | 2,753                      |   |                                      | $ | 500  |                   |  | $ |                                               |  | $ | (3,932                    | ) |  | $ | 22,500 |   |  | $ |       |   |  | $ | 35,827 |  
|Net income                                                           |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   | 6,414  |   |  |   |       |   |  |   | 6,414  |  
|Pension adjustment                                                   |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   | 893                       |   |  |   |       |   |  |   |       |   |  |   | 893    |  
|                                                                     |  |              |        |         |                |   |         |              |  |   |                            |   |                                      |   |      |                   |  |   |                                                |  |   |                           |   |  |   |        |   |  |   |        |   |  |   |        |  
|Total comprehensive income                                           |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   |       |   |  |   |       |   |  |   | 7,307  |  
|Transfer of Class A to preferred stock due to member reorganizations |  |              |       |         |                |   | 49      |              |  |   | (49                        | ) |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   |       |   |  |   |       |   |  |   |       |  
|Patronage refunds:                                                   |  |              |        |         |                |   |         |              |  |   |                            |   |                                      |   |      |                   |  |   |                                                |  |   |                           |   |  |   |        |   |  |   |        |   |  |   |        |  
|Payable in cash:                                                     |  |              |        |         |                |   |         |              |  |   |                            |   |                                      |   |      |                   |  |   |                                                |  |   |                           |   |  |   |        |   |  |   |        |   |  |   |        |  
|Class A                                                              |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   | (1,420 | ) |  |   |       |   |  |   | (1,420 | )
|Class B                                                              |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   | (449   | ) |  |   |       |   |  |   | (449   | )
|Application of current year patronage to common and preferred stock  |  |              |       |         |                |   | 851     |              |  |   | 65                         |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   | (916   | ) |  |   |       |   |  |   |       |  
|Cash received on shares issued and subscribed                        |  |              |       |         |                |   |        |              |  |   | 1                          |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   |       |   |  |   |       |   |  |   | 1      |  
|Cash disbursed on shares retired                                     |  |              |       |         |                |   | (1,036  | )            |  |   | (401                       | ) |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   |       |   |  |   |       |   |  |   | (1,437 | )
|                                                                     |  |              |        |         |                |   |         |              |  |   |                            |   |                                      |   |      |                   |  |   |                                                |  |   |                           |   |  |   |        |   |  |   |        |   |  |   |        |  
|Balance at August 31, 2004                                           |  |              |       |         |                |   | 13,870  |              |  |   | 2,369                      |   |                                      |   | 500  |                   |  |   |                                               |  |   | (3,039                    | ) |  |   | 26,129 |   |  |   |       |   |  |   | 39,829 |  
|                                                                     |  |              |        |         |                |   |         |              |  |   |                            |   |                                      |   |      |                   |  |   |                                                |  |   |                           |   |  |   |        |   |  |   |        |   |  |   |        |  
|Net income                                                           |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   | 6,580  |   |  |   |       |   |  |   | 6,580  |  
|Pension adjustment                                                   |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   | (1,516                    | ) |  |   |       |   |  |   |       |   |  |   | (1,516 | )
|                                                                     |  |              |        |         |                |   |         |              |  |   |                            |   |                                      |   |      |                   |  |   |                                                |  |   |                           |   |  |   |        |   |  |   |        |   |  |   |        |  
|Total comprehensive income                                           |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   |       |   |  |   |       |   |  |   | 5,064  |  
|Application of prior years patronage                                |  |              |       |         |                |   | 6       |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   | (6     | ) |  |   |       |   |  |   |       |  
|Conversion, as a result of restructuring                             |  |              | 16,737 |         |                |   | (13,872 | )            |  |   | (2,365                     | ) |                                      |   | (500 | )                 |  |   |                                               |  |   |                          |   |  |   |       |   |  |   |       |   |  |   |       |  
|Repurchase of stock                                                  |  |              | (605   | )       |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   |       |   |  |   |       |   |  |   | (605   | )
|Cash received on shares issued                                       |  |              | 6,231  |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   |       |   |  |   | (4,487 | ) |  |   | 1,744  |  
|Cash disbursed on shares retired                                     |  |              |       |         |                |   | (4      | )            |  |   | (4                         | ) |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   |       |   |  |   |       |   |  |   | (8     | )
|Registration costs                                                   |  |              | (839   | )       |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   |       |   |  |   |       |   |  |   | (839   | )
|                                                                     |  |              |        |         |                |   |         |              |  |   |                            |   |                                      |   |      |                   |  |   |                                                |  |   |                           |   |  |   |        |   |  |   |        |   |  |   |        |  
|Balance at August 31, 2005                                           |  |              | 21,524 |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   | (4,555                    | ) |  |   | 32,703 |   |  |   | (4,487 | ) |  |   | 45,185 |  
|                                                                     |  |              |        |         |                |   |         |              |  |   |                            |   |                                      |   |      |                   |  |   |                                                |  |   |                           |   |  |   |        |   |  |   |        |   |  |   |        |  
|Net income                                                           |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   | 15,257 |   |  |   |       |   |  |   | 15,257 |  
|Pension adjustment                                                   |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   | 2,600                     |   |  |   |       |   |  |   |       |   |  |   | 2,600  |  
|                                                                     |  |              |        |         |                |   |         |              |  |   |                            |   |                                      |   |      |                   |  |   |                                                |  |   |                           |   |  |   |        |   |  |   |        |   |  |   |        |  
|Total comprehensive income                                           |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   |       |   |  |   |       |   |  |   | 17,857 |  
|Dividends paid ($0.60 per share)                                     |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   | (2,898 | ) |  |   |       |   |  |   | (2,898 | )
|Stock compensation                                                   |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   | 120                                            |  |   |                          |   |  |   |       |   |  |   |       |   |  |   | 120    |  
|Change in value of shares held by ESOP                               |  |              |       |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   |       |   |  |   | (1,369 | ) |  |   | (1,369 | )
|Cash received on shares issued                                       |  |              | 223    |         |                |   |        |              |  |   |                           |   |                                      |   |     |                   |  |   |                                               |  |   |                          |   |  |   |       |   |  |   | (223   | ) |  |   |       |  
|                                                                     |  |              |        |         |                |   |         |              |  |   |                            |   |                                      |   |      |                   |  |   |                                                |  |   |                           |   |  |   |        |   |  |   |        |   |  |   |        |  
|Balance at August 31, 2006                                           |  | $            | 21,747 |         |                | $ |        |              |  | $ |                           |   |                                      | $ |     |                   |  | $ | 120                                            |  | $ | (1,955                    | ) |  | $ | 45,062 |   |  | $ | (6,079 | ) |  | $ | 58,895 |  
|                                                                     |  |              |        |         |                |   |         |              |  |   |                            |   |                                      |   |      |                   |  |   |                                                |  |   |                           |   |  |   |        |   |  |   |        |   |  |   |        |  

See accompanying notes to consolidated financial statements.



F-4



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FCSTONE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



|                                                                                                          |  |                       |         |   |      |   |         |      |  |   |         |  
|--------------------------------------------------------------------------------------------------------- |  | --------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                                                          |  | Year Ended August 31, |        
|                                                                                                          |  | 2004                  |         |   | 2005 |   |         | 2006 | 
|Cash flows from operating activities:                                                                     |  |                       |         |   |      |   |         |      |  |   |         |  
|Net income                                                                                                |  | $                     | 6,414   |   |      | $ | 6,580   |      |  | $ | 15,257  |  
|Depreciation                                                                                              |  |                       | 861     |   |      |   | 1,551   |      |  |   | 1,674   |  
|Amortization of discount on note receivable                                                               |  |                       |        |   |      |   |        |      |  |   | (46     | )
|Gain on sale of exchange memberships and stock                                                            |  |                       | (833    | ) |      |   | (1,750  | )    |  |   |        |  
|Equity in earnings of affiliates, net of distributions                                                    |  |                       | (66     | ) |      |   | (25     | )    |  |   | 591     |  
|Minority interest, net of distributions                                                                   |  |                       | 1,380   |   |      |   | (733    | )    |  |   | (237    | )
|Change in commodity accounts receivable/payable, marketable securities and customer segregated funds, net |  |                       | (12,535 | ) |      |   | (33,097 | )    |  |   | (16,186 | )
|(Increase) decrease in accounts receivable and advances on grain                                          |  |                       | (19,622 | ) |      |   | (3,379  | )    |  |   | 815     |  
|Decrease (increase) in inventoriesgrain, fertilizer and fuel                                             |  |                       | 10,831  |   |      |   | (2,407  | )    |  |   | (12,023 | )
|Increase in other assets                                                                                  |  |                       | (1,627  | ) |      |   | (356    | )    |  |   | (3,998  | )
|Increase in accounts payable                                                                              |  |                       | 30,152  |   |      |   | 60,908  |      |  |   | 45,932  |  
|Increase in accrued expenses                                                                              |  |                       | 2,147   |   |      |   | 3,052   |      |  |   | 9,233   |  
|                                                                                                          |  |                       |         |   |      |   |         |      |  |   |         |  
|Net cash provided by operating activities                                                                 |  |                       | 17,102  |   |      |   | 30,344  |      |  |   | 41,011  |  
|                                                                                                          |  |                       |         |   |      |   |         |      |  |   |         |  
|Cash flows from investing activities:                                                                     |  |                       |         |   |      |   |         |      |  |   |         |  
|Purchase of furniture, equipment, and improvements                                                        |  |                       | (918    | ) |      |   | (1,105  | )    |  |   | (1,255  | )
|Acquisition of equity investment                                                                          |  |                       |        |   |      |   |        |      |  |   | (2,405  | )
|Acquisition of minority interest                                                                          |  |                       |        |   |      |   |        |      |  |   | (911    | )
|Collection (issuance) of notes receivable                                                                 |  |                       | 9,732   |   |      |   | (7,553  | )    |  |   | (5,458  | )
|Purchase of exchange memberships and stock                                                                |  |                       | (68     | ) |      |   | (925    | )    |  |   | (5,403  | )
|Proceeds from sale of exchange memberships and stock                                                      |  |                       | 1,912   |   |      |   | 2,100   |      |  |   | 613     |  
|                                                                                                          |  |                       |         |   |      |   |         |      |  |   |         |  
|Net cash provided by (used in) investing activities                                                       |  |                       | 10,658  |   |      |   | (7,483  | )    |  |   | (14,819 | )
|                                                                                                          |  |                       |         |   |      |   |         |      |  |   |         |  
|Cash flows from financing activities:                                                                     |  |                       |         |   |      |   |         |      |  |   |         |  
|Increase (decrease) in checks written in excess of bank balance                                           |  |                       | 8,022   |   |      |   | (3,142  | )    |  |   | 1,556   |  
|(Payments on) proceeds from note payable, net                                                             |  |                       | (34,517 | ) |      |   | (4,620  | )    |  |   | 11,258  |  
|Proceeds from issuance of common stock                                                                    |  |                       | 1       |   |      |   | 1,744   |      |  |   |        |  
|Proceeds from issuance of redeemable common stock held by ESOP                                            |  |                       |        |   |      |   | 4,487   |      |  |   | 223     |  
|Payment for redemption of stock                                                                           |  |                       | (1,437  | ) |      |   | (613    | )    |  |   |        |  
|Payment of prior year patronage                                                                           |  |                       | (1,429  | ) |      |   | (1,869  | )    |  |   |        |  
|Dividends paid                                                                                            |  |                       |        |   |      |   |        |      |  |   | (2,898  | )
|Payments under capital lease                                                                              |  |                       | (688    | ) |      |   | (550    | )    |  |   | (550    | )
|Proceeds from subordinated debt                                                                           |  |                       | 5,750   |   |      |   | 9,000   |      |  |   | 4,500   |  
|Payment of subordinated debt                                                                              |  |                       | (500    | ) |      |   | (9,250  | )    |  |   | (3,000  | )
|Monies deposited in escrow                                                                                |  |                       |        |   |      |   | (7      | )    |  |   | (2,600  | )
|Debt issuance costs                                                                                       |  |                       | (125    | ) |      |   |        |      |  |   |        |  
|Registration costs                                                                                        |  |                       |        |   |      |   | (839    | )    |  |   |        |  
|                                                                                                          |  |                       |         |   |      |   |         |      |  |   |         |  
|Net cash (used in) provided by financing activities                                                       |  |                       | (24,923 | ) |      |   | (5,659  | )    |  |   | 8,489   |  
|                                                                                                          |  |                       |         |   |      |   |         |      |  |   |         |  
|Net increase in cash and cash equivalentsunrestricted                                                    |  |                       | 2,837   |   |      |   | 17,202  |      |  |   | 34,681  |  
|Cash and cash equivalentsunrestrictedat beginning of year                                               |  |                       | 5,006   |   |      |   | 7,843   |      |  |   | 25,045  |  
|                                                                                                          |  |                       |         |   |      |   |         |      |  |   |         |  
|Cash and cash equivalentsunrestrictedat end of year                                                     |  | $                     | 7,843   |   |      | $ | 25,045  |      |  | $ | 59,726  |  
|                                                                                                          |  |                       |         |   |      |   |         |      |  |   |         |  
|Supplemental disclosures of cash flow information:                                                        |  |                       |         |   |      |   |         |      |  |   |         |  
|Cash paid during the year for:                                                                            |  |                       |         |   |      |   |         |      |  |   |         |  
|Interest                                                                                                  |  | $                     | 4,785   |   |      | $ | 3,821   |      |  | $ | 5,587   |  
|Income taxes                                                                                              |  |                       | 2,057   |   |      |   | 4,215   |      |  |   | 10,335  |  
|                                                                                                          |  |                       |         |   |      |   |         |      |  |   |         |  
|Supplemental disclosure of noncash investing and financing activities:                                    |  |                       |         |   |      |   |         |      |  |   |         |  
|Application of current year patronage to common and preferred stock                                       |  | $                     | 916     |   |      | $ |        |      |  | $ |        |  
|Transfer of Class A common stock to preferred stock, due to member reorganizations                        |  |                       | 49      |   |      |   |        |      |  |   |        |  
|Transfer of retained earnings to patronage payable, due to patronage refunds                              |  |                       | 1,869   |   |      |   |        |      |  |   |        |  
|                                                                                                          |  |                       |         |   |      |   |         |      |  |   |         |  

See accompanying notes to consolidated financial statements.



F-5



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED MATTERS

ORGANIZATION

The accompanying consolidated financial statements include the financial statements of FCStone Group,
Inc. and its wholly-owned subsidiaries, FCStone, L.L.C. (FCStone); FCC Investments, Inc. (FCC Investments); FCStone Trading L.L.C. (FCStone Trading); FCC Futures, Inc.; FCStone Financial, Inc. (FCStone Financial); FCStone Forex LLC; FCStone
International, LLC; FCStone Merchant Services, LLC (FCStone Merchant Services); and 70% owned FGDI, L.L.C. (FGDI) (collectively, the Company). All significant intercompany balances and transactions have been eliminated in consolidation.

FCStone is a commodity futures commission merchant servicing customers primarily in grain and energy related businesses. FCC Investments is registered
as a securities broker-dealer. FCStone Trading provides risk management consulting services, acts as a dealer in over-the-counter (OTC) derivative contracts on physical commodities. FCC Futures, Inc. acts as a guaranteed introducing broker of
FCStone and is registered with the National Futures Association. FCStone Financial provides railcar services to grain companies through leasing and subleasing of railcars and also enters into sale/repurchase agreements with grain companies for the
purchase and sale of certain commodities. FCStone Forex LLC provides OTC interbank currency dealing services to self-directed and professionally managed client accounts. FGDIs primary operations relate to grain merchandising. FCStone Merchant
Services provides specialized financing through inventory repurchase arrangements, transactional commodity finance arrangements, and processing and tolling arrangements. FCStone International, LLC owns subsidiaries formed in Canada and Brazil.

The Companys investment in Farmers Commodities Transportation Company, LLC (FCTC) represents 10% of the outstanding member units and
is reported under the equity method at August 31, 2005 and 2006. FCTC provides railcar service through the leasing and subleasing of railcars and brokering the usage of these cars. FCStone provides management services, including accounting,
administrative, personnel, and office space, to FCTC and has two members on FCTCs board of directors. The Company also has minority holdings in three other entities, Green Diesel LLC, Lehi Mills L.L.C. and Hurley & Associates, all of
which are carried under the equity method.

On March 1, 2005, the voting members of the Company approved the restructuring of the
Company by terminating the Companys cooperative status and ending the patronage-based rights accruing to the Companys members (see note 10).

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

COMMODITY DEPOSITS AND
ACCOUNTS RECEIVABLE/PAYABLE

Commodity accounts include equities and deficits in open futures and option contracts and funds
received to margin or guarantee commodity transactions. The Company is obligated to fund margin calls on open contracts and, in turn, receives reimbursement from customers for maintenance of their respective margins. In accordance with the Commodity
Futures Trading Commissions regulations, customer funds received to margin, guarantee,



F-6



---

FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



and/or secure commodity futures transactions are segregated and accounted for separately from the general assets of the Company. Commodity deposits and
receivables with clearing organizations and commodity customer payables are reported gross except where a right of offset exists. The future collectability of these amounts can be impacted by the Companys collection efforts, the financial
stability of its customers and the general economic climate in which it operates. The Company evaluates accounts that it believes may become uncollectible through reviewing margin deficit reports and by monitoring the financial strength of its
customers.

MARKETABLE SECURITIES

Marketable securities consist of short-term overnight investments in U.S. Treasury and U.S. Government Agency repurchase agreements and money market funds allowed by the Commodities Futures Trading Commissions regulations for
segregated customer funds. These securities are reported at market value, which approximates cost given their short-term nature.

TRADE ACCOUNTS
RECEIVABLE

The Company records trade receivables due from its customers at the time sales are recorded in accordance with its
revenue recognition policy. The future collectibility of these amounts can be impacted by the Companys collection efforts, the financial stability of its customers, and the general economic climate in which it operates. The Company applies a
consistent practice of establishing an allowance for accounts that it believes may become uncollectible through reviewing the historical aging of its receivables and by monitoring the financial strength of its customers. If the Company becomes aware
of a customers inability to meet its financial obligations (e.g., where it has filed for bankruptcy), the Company establishes a specific allowance for the potential bad debt to reduce the net recognized receivable to the amount it reasonably
believes it is probable will be collected.

NOTES RECEIVABLE

FCStone Financial and FCStone Merchant Services accept notes receivable under sale/repurchase agreements with customers whereby the customers sell certain commodity inventory to them and agree to repurchase the
commodity inventory from them at a future date. The customers bear the risk of changes in market price while under contract and are required to maintain a security account with FCStone to hedge this risk. FCStone Financial and FCStone Merchant
Services apply SFAS 49, Accounting for Product Financing Arrangements, and accordingly, these transactions are treated as secured borrowings rather than commodity inventory in the Companys financial statements. Interest is accrued on
the outstanding notes balance on a daily basis using an applicable interest rate, which ranged from 7.25% to 10.75% during 2006, from 7.50% to 8.25% during 2005 and from 3.75% to 5.50% during 2004. The notes are carried at their principal balance
which approximates fair value.

During 2006, FCStone Merchant Services loaned $1.5 million to Green Diesel LLC as part of its financing to
build a biodiesel production facility to be located in Houston, Texas. The note receivable bears interest on the principal balance outstanding at an annual rate of 10% and matures on October 31, 2008. The terms of the loan agreement included
the issuance of warrants exercisable for up to 48% of the equity of Green Diesel. FCStone Merchants Services has discounted the note receivable relative to the value assigned to the warrants, which has been reported in other assets on the
consolidated statement of financial condition. The discount is being amortized over the term of the loan agreement as an adjustment of the loan yield through interest income on the consolidated statement of operations.



F-7



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



INVENTORIES

Grain inventories are carried at market value, which is net realizable value (NRV). NRV is determined by estimating selling prices in the applicable market location and related costs of disposal in the ordinary course
of business. Realized and unrealized gains and losses on futures contracts are credited or charged to current cost of sales.

Fertilizer
inventory is recorded at the lower of cost or market using the first-in, first-out method.

Fuel inventory is recorded at the lower of cost
or market using the weighted average method. FCStone Trading had a minimum line fill requirement at two pipeline companies which expired during fiscal 2006.

A summary of inventories as of August 31, 2005 and 2006 are as follows:



|           |  |      |            |      |   |           
|---------- |  | ---- | ---------- | ---- | - | ----------
|           |  | 2005 |            | 2006
|Grain      |  | $    | 13,507,493 |      | $ | 25,539,782
|Fertilizer |  |      | 633,293    |      |   | 1,087,799 
|Fuel       |  |      | 464,315    |      |   |          
|           |  |      |            |      |   |           
|           |  | $    | 14,605,101 |      | $ | 26,627,581
|           |  |      |            |      |   |           

DERIVATIVE FINANCIAL INSTRUMENTSGRAIN

FGDIs use of derivative instruments includes commodity futures and option contracts offered through regulated commodity exchanges to reduce price
risk. FGDI does not use derivative instruments for trading purposes and have procedures in place to monitor and control their use.

Accounting for these derivative instruments is done in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities as amended by SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. Derivative instruments are required to be reported on the consolidated statements of financial condition at fair values. Fair values are determined based on published prices from regulated
commodity exchanges.

COMMODITY PRICE RISK

FGDI has open cash contracts for the purchase and sale of grain, which are reported at market value and the resulting gains or losses are recognized currently in cost of products sold. FGDI is exposed to risks that it
may not have sufficient grain quantity to deliver against its contacts and thus would be obligated to purchase grain at prevailing market prices in order to meet such commitments. FGDI is exposed to risk of loss in the market value of net open
commodity positions, which are calculated by aggregating grain inventories and cash grain purchases and sales contracts. In order to reduce these risks, FGDI generally takes opposite and offsetting positions using futures contracts or options.

Realized and unrealized gains and losses on futures contracts and option contracts used as economic hedges of grain inventories and
purchase and sale contracts are recognized in cost of products sold for financial reporting, using market prices. Inventories and cash purchase and sale contracts are marked to fair value using market-based prices so that gains and losses on the
derivative contracts are offset by gains or losses on inventories and purchase and sale contracts.



F-8



---

FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



HEDGE POLICYFUEL

The Company follows the policy of hedging its fuel purchases made on behalf of its customers to minimize the risk due to market fluctuations. The gains and losses relating to closed hedge positions are either billed
to or returned to the customer and are allocated based upon their respective volume of business. The Company is exposed to credit risk of customers, to the extent they fail to settle their obligations.

Balances receivable from or due to customers under these hedging contracts are reported at market value based on publicly available third-party pricing
services and reflected as other receivables or accounts payablecustomers in the financial statements and the related unrealized gain or loss is recorded in cost of fuel sold.

FURNITURE, EQUIPMENT, SOFTWARE, AND IMPROVEMENTS

Furniture, equipment, software, and
improvements are recorded at cost. Expenditures for maintenance, repairs, and minor replacements are charged to operations, while expenditures for major replacements and betterments are capitalized.

FGDI had leased property, primarily comprised of grain bins, under capital lease having a net carrying value of $4,950,000 and $4,331,250 at
August 31, 2005 and 2006, respectively (see note 9).

Depreciation expense is provided using the straight-line method over the
estimated useful lives of the assets. Furniture, equipment, and leasehold improvements are depreciated over five to forty years. Software is depreciated over a useful life of three years. Capital leases for grain bins are depreciated over the
remaining life of the lease from the date placed in service.

CASH AND CASH EQUIVALENTSUNRESTRICTED

Cash equivalents consist of investments with original maturities of three months or less and include money market funds totaling $17,329,530 and
$48,591,534 at August 31, 2005 and 2006, respectively.

CASH AND CASH EQUIVALENTSRESTRICTED

FCStone and FGDI have deposited monies into an escrow account held at a financial institution, in connection with FGDIs capital lease obligation
(see note 8). The deposited funds, and all earnings, are required to be held in escrow until repayment of the bond sinking fund. Additionally, FCStone Trading has deposited monies in a money market fund and can only be used as collateral for a
letter of credit agreement (see Note 12).

CASH AND CASH EQUIVALENTSSEGREGATED

Pursuant to requirements of the Commodity Exchange Act, funds deposited by customers relating to futures contracts in regulated commodities must be
carried in separate accounts which are designated as segregated customers accounts. At August 31, 2005 and 2006, cash and cash equivalentssegregated included an interest bearing cash account of $5,043,322 and $6,080,886,
respectively, for deposit of customer funds.

MINORITY INTERESTS

Minority interest in net assets and income reflected in the accompanying consolidated financial statements consists of:

a) A 30% minority interest, held since 2001, by an unaffiliated third party in FGDI, a domestic limited liability company, for 2005 and 2006.



F-9



---

FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



b) A 30% minority interest, from October 2004 through March 2006, held by an unaffiliated third party
in FCStone Merchant Services, a domestic limited liability company for 2005 and 2006. Effective March 31, 2006, the Company redeemed the minority ownership interest in accordance with the Limited Liability Company Agreement. On April 1,
2006, FCStone Merchant Services became a wholly owned subsidiary of the Company.

The following tables set forth the components of minority
interest in the consolidated statements of financial condition:



|                               |  |           |           |      |   |          
|------------------------------ |  | --------- | --------- | ---- | - | ---------
|                               |  | August 31
|                               |  | 2005      |           | 2006
|FGDI, LLC                      |  | $         | 3,736,249 |      | $ | 3,607,344
|FCStone Merchant Services, LLC |  |           | 1,018,776 |      |   |         
|                               |  |           |           |      |   |          
|Total                          |  | $         | 4,755,025 |      | $ | 3,607,344
|                               |  |           |           |      |   |          

COMMON STOCK HELD BY ESOP

In 2005, the Company formed an employee stock ownership plan (ESOP) and the ESOP purchased shares of the Companys common stock. The Companys
maximum cash obligation related to these shares is classified outside stockholders equity because the shares are not readily traded and could be put to the Company for cash upon termination by an employee.

OTHER COMPREHENSIVE INCOME (LOSS)

Other
comprehensive income (loss) refers to expense, gains, and losses that are included in comprehensive income (loss) but are excluded from net income as these amounts are recorded directly as an adjustment to stockholders equity, net of tax. The
Companys other comprehensive income (loss) is comprised of minimum pension liability adjustments, net of tax.

COMMISSION REVENUE AND EXPENSE
AND CLEARING AND TRANSACTION FEES

Commissions on futures contracts are recognized when the related open commodity futures
transaction is made (opened and closed). Commissions on option contracts are recognized upon the purchase or sale of the option. Clearing and transaction fees are charged when each trade is made (opened and closed).

SERVICE AND CONSULTING FEES

Risk management
service and consulting fees are billed and recognized as revenue on a monthly basis when such services are provided. Such agreements are generally for one-year periods but are cancelable by either party with a 30-day notice.

REVENUE RECOGNITION ON PURCHASE AND SALE OF COMMODITIES

The Company recognizes revenue on sales when the agricultural products or fuel are shipped and/or the customer takes ownership and assumes risk of loss. In addition, in accordance with accounting principles generally
accepted in the United States of America, revenues from certain activities should be reported gross with a separate display of cost of sales. Revenues from our grain merchandising and fuel sales have been presented gross. These grain merchandising
and fuel sales include activities in which we are the primary obligor responsible for fulfillment, act as principal, change the product or perform part of the service, take title to the inventory and assume the risk and rewards of ownership, such as
the risk of loss for collection and delivery.



F-10



---

FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



REVENUE RECOGNITION ON COMMODITY FINANCING TRANSACTIONS

The Company recognizes revenue on sales in instances where the Company is not the primary obligor in the arrangement, based on the amount retained. These
commodity financing transactions include activities in which the Company does not take title to the commodities and does not have the risks and rewards of ownership. The Companys compensation, a stated percentage of the transactions
profit, is calculated and recorded upon settlement of the transaction, as funds become available for distribution.

OTHER REVENUES

The Company reports its equity in the earnings of unconsolidated affiliates as other revenue. This amounted to $65,569, $25,263 and
a loss of $584,029, in 2004, 2005 and 2006, respectively. The 2006 amount included a write-off of $737,727 related to an unaffiliated equity investment.

The Company recorded a gain on the sale of a Chicago Board of Trade exchange seat in the amount of $1,749,850 in 2005, which is included in other income.

The Company recorded a gain on the sale of its investment in The Clearing Corporation stock of $832,880 in 2004, which is included in other income.

STOCK-BASED COMPENSATION

On
June 13, 2006, the Company issued stock options and adopted the fair value method of accounting for stock-based in accordance with SFAS No. 123, Accounting for Stock-Based Compensation (SFAS 123), as described in Note 7. The options were
fully vested and exercisable upon issuance. The Company obtained a third party valuation of the fair value of the shares to establish the fair value of the shares for purposes of determining the stock option strike price. The value of the stock
options issued was based upon an option-pricing model using the minimum value method as allowed under SFAS 123 and was recognized as an expense in the period granted.

In December 2004, the Financial Accounting Standards Board (FASB) issued FAS No. 123 (Revised 2004), Share-Based Payment (FAS 123(R)). This statement requires that the
compensation cost relating to share based payment transactions be recognized in the financial statements. Compensation cost is to be measured based on the estimated fair value of the equity-based compensation awards issued as of the grant date. The
related compensation expense will be based on the estimated number of awards expected to vest and will be recognized over the requisite service period (often the vesting period) for each grant. The statement requires the use of assumptions and
judgments about future events and some of the inputs to the valuation models will require considerable judgment by management. FAS 123(R) replaces FAS 123 and supersedes APB 25. The Company will adopt FAS 123(R) as of September 1, 2006 using
the modified prospective transition method, which will not impact the options granted in fiscal 2006, unless they are subsequently modified.

PATRONAGE REFUNDS

Prior to September 1, 2004, the Company operated on a cooperative basis; accordingly,
substantially all savings arising from business transacted with or for members were allocated to them in the form of cash or stockholders equity.

INCOME TAXES

Prior to September 1, 2004, the Company operated as a nonexempt cooperative under Sections 1381
through 1388 of the Internal Revenue Code. Accordingly, federal income taxes were based on nonmember savings and the portion of member savings not allocated as patronage refunds, if any. The companies file a consolidated income tax return, and
income taxes are allocated to the companies on the basis of their taxable income.



F-11



---

FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Deferred tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Valuation allowances will be recorded
to reduce deferred tax assets when is more likely than not that a tax benefit will not be realized.

RECLASSIFICATIONS

Certain amounts in the fiscal year 2004 and 2005 consolidated financial statements have been reclassified. Revenues generated from ocean vessel dockage
and related income in our grain merchandising segment have been reclassified to other income from sales of commodities. Expenses related to the dock facility in our grain merchandising segment have been reclassified from cost of commodities sold to
the applicable expense. These reclassifications are not significant and are intended to result in revenues and costs associated with grain merchandising that better reflect the purchases and delivery of grain, excluding revenues and expenses that
are ancillary to those operations.

2. EXCHANGE MEMBERSHIPS AND STOCK

The Company has exchange memberships seats on the Chicago Board of Trade, the Board of Trade of Kansas City, Missouri, Inc., the Minnesota Grain Exchange, and the New York Mercantile Exchange. Additionally, the
Company holds stock of the Chicago Mercantile Exchange and the New York Mercantile Exchange. These exchange memberships and stock provide FCStone the right to process trades directly with the various exchanges. The exchange memberships and stock are
recorded at cost, in accordance with U.S. GAAP and Commodity Futures Trading Commission (CFTC) regulations.

3. SEGREGATED REQUIREMENTS

Pursuant to the requirements of the Commodity Exchange Act, funds deposited by customers of FCStone relating to futures contracts in regulated
commodities must be carried in separate accounts which are designated as segregated customers accounts. Certain amounts in the accompanying table reflect reclassifications and eliminations required for regulatory filing and as a result, may
differ from those presented in the accompanying consolidated statements of financial position. Funds deposited by customers and other assets, which have been aggregated as belonging to the commodity customers at August 31, 2005 and 2006, are as
follows:



|                                                                                                                                                             |  |      |             |      |   |            
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ----------- | ---- | - | -----------
|                                                                                                                                                             |  | 2005 |             | 2006
|Cash-segregated                                                                                                                                              |  | $    | 9,818,297   |      | $ | 12,388,880 
|Marketable securities, at fair valuecustomer segregated                                                                                                     |  |      | 191,951,270 |      |   | 149,234,280
|Marketable securities held at a bank classified in commodity deposits and accounts receivable from commodity exchanges and clearing
organizations            |  |      | 27,056,721  |      |   | 19,428,569 
|Commodity deposits and accounts receivable from commodity exchanges and clearing organizations, including marketable securities, net of
omnibus eliminations |  |      | 365,906,721 |      |   | 576,799,335
|Securities held for customers in lieu of cash                                                                                                                |  |      |            |      |   | 6,995,610  
|                                                                                                                                                             |  |      |             |      |   |            
|Total customer segregated funds                                                                                                                              |  |      | 594,733,009 |      |   | 764,846,674
|                                                                                                                                                             |  |     
|Amount required to be segregated                                                                                                                             |  |      | 571,451,661 |      |   | 727,680,363
|                                                                                                                                                             |  |      |             |      |   |            
|Excess funds in segregation                                                                                                                                  |  | $    | 23,281,348  |      | $ | 37,166,311 
|                                                                                                                                                             |  |      |             |      |   |            



F-12



---

FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Funds deposited by customers and other assets, which are held in separate accounts for foreign
futures, and foreign options customers at August 31, 2005 and 2006 are as follows:



|                                                       |  |      |         |      |   |          
|------------------------------------------------------ |  | ---- | ------- | ---- | - | ---------
|                                                       |  | 2005 |         | 2006
|Cash-segregated                                        |  | $    | 100,000 |      | $ | 136,735  
|Equities with registered futures commissions merchants |  |      | 72,625  |      |   | 222,024  
|Amounts held by members of foreign boards of trade     |  |      | 787,224 |      |   | 2,661,020
|                                                       |  |      |         |      |   |          
|                                                       |  |      | 959,849 |      |   | 3,019,779
|                                                       |  |     
|Amount required to be segregated                       |  |      | 130,584 |      |   | 1,583,764
|                                                       |  |      |         |      |   |          
|Excess funds in segregation                            |  | $    | 829,265 |      | $ | 1,436,015
|                                                       |  |      |         |      |   |          

4. INCOME TAXES

Income tax expense consists of current and deferred taxes as follows:



|                         |  |      |           |   |      |   |            |      |  |   |            |  
|------------------------ |  | ---- | --------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                         |  | 2004 |           |   | 2005 |   |            | 2006 | 
|Current:                 |  |      |           |   |      |   |            |      |  |   |            |  
|Federal                  |  | $    | 2,425,700 |   |      | $ | 4,027,000  |      |  | $ | 10,549,000 |  
|State and local          |  |      | 256,300   |   |      |   | 373,000    |      |  |   | 925,000    |  
|                         |  |      |           |   |      |   |            |      |  |   |            |  
|Total current            |  |      | 2,682,000 |   |      |   | 4,400,000  |      |  |   | 11,474,000 |  
|                         |  |      |           |   |      |   |            |      |  |   |            |  
|Deferred:                |  |      |           |   |      |   |            |      |  |   |            |  
|Federal                  |  |      | (615,700  | ) |      |   | (402,000   | )    |  |   | (1,962,000 | )
|State and local          |  |      | (36,300   | ) |      |   | (48,000    | )    |  |   | (12,000    | )
|                         |  |      |           |   |      |   |            |      |  |   |            |  
|Total deferred           |  |      | (652,000  | ) |      |   | (450,000   | )    |  |   | (1,974,000 | )
|                         |  |      |           |   |      |   |            |      |  |   |            |  
|Total income tax expense |  | $    | 2,030,000 |   |      | $ | 3,950,0000 |      |  | $ | 9,500,000  |  
|                         |  |      |           |   |      |   |            |      |  |   |            |  

Total income tax expense differs from the expected tax expense computed by applying
the federal income tax rate of 34% in fiscal years 2004 and 2005 and 35% in fiscal year 2006 to earnings before income tax expense as follows:



|                               |  |      |            |   |      |   |           |  |   |          
|------------------------------ |  | ---- | ---------- | - | ---- | - | --------- |  | - | ---------
|                               |  | 2004 |            |   | 2005 |   | 2006     
|Expected tax expense         |  | $    | 2,870,937  |   |      | $ | 3,580,247 |  | $ | 8,664,950
|Patronage refund deduction     |  |      | (1,002,609 | ) |      |   |          |  |   |         
|State income tax               |  |      | 145,300    |   |      |   | 214,500   |  |   | 593,450  
|Non-deductible items and other |  |      | 16,372     |   |      |   | 155,253   |  |   | 241,600  
|                               |  |      |            |   |      |   |           |  |   |          
|Income tax expense             |  | $    | 2,030,000  |   |      | $ | 3,950,000 |  | $ | 9,500,000
|                               |  |      |            |   |      |   |           |  |   |          

The tax effects of temporary differences that give rise to deferred income tax assets are:



|                        |  |      |           |      |   |          
|----------------------- |  | ---- | --------- | ---- | - | ---------
|                        |  | 2005 |           | 2006
|Pension liability       |  | $    | 2,182,500 |      | $ | 1,590,029
|Deferred compensation   |  |      | 1,440,100 |      |   | 2,148,600
|Bad debt reserve        |  |      | 243,000   |      |   | 532,800  
|All other assets        |  |      | 147,100   |      |   | 425,096  
|                        |  |      |           |      |   |          
|Net deferred tax assets |  | $    | 4,012,700 |      | $ | 4,696,525
|                        |  |      |           |      |   |          



F-13



---

FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Based on the level of historical taxable income and projections for future taxable income over the
periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences. As such, no valuation allowances have been provided.

5. EARNINGS PER SHARE

Earnings per share has been
presented in the accompanying Consolidated Statement of Operations. Basic earnings per shares excludes dilution and is computed by dividing the applicable net earnings by the weighted average number of common shares outstanding for the period.
Diluted earnings per share is calculated based on the weighted average shares of common stock as adjusted for the potential dilutive effect of stock options. Stock-based compensation arrangements, including options, are considered to be outstanding
as of the grant date for purposes of computing diluted earnings per share. Options to purchase 400,000 shares of common stock at $24.76 per share (see Note 7) were outstanding during the fourth quarter of 2006 but were not included in the
computation of diluted EPS. As the Companys common stock is not traded on a public exchange, there has been no change between the fair value of the options at the grant date that would give rise to a dilutive effect. The calculation of the
basic and diluted shares outstanding for the year ended August 31, 2005, assumes the shares issued as a result of the restructuring (see Note 10) had been issued and outstanding for the full year. Prior to the conversion from a cooperative to a
corporation, per share data had been omitted because, under the cooperative structure, earnings of the Company were distributed as patronage dividends to members based on the level of business conducted with the Company as opposed to a common
shareholders proportionate share of underlying equity in the Company. Under the corporate structure, earnings of the Company may be distributed to shareholders based on their proportionate share of underlying equity.

6. RETIREMENT PLANS

The Company has a
noncontributory retirement plan, which is a defined benefit plan that covers substantially all employees. Effective April 1, 2006, such plan was closed to new employees hired subsequent to the April 1, 2006 date. Additionally, the Company
has a nonqualified noncontributory retirement plan covering certain executive employees. The Companys policy is to fund amounts that are intended to provide for benefits attributed to service to date.



F-14



---

FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following table presents changes in, and components of, the Companys net liability for
retirement costs:



|                                                       |  |      |            |   |      |   |             |      |  |   |            |  
|------------------------------------------------------ |  | ---- | ---------- | - | ---- | - | ----------- | ---- |  | - | ---------- | -
|Changes in Benefit Obligation                          |  | 2004 |            |   | 2005 |   |             | 2006 | 
|Benefit obligation at beginning of year                |  | $    | 17,536,068 |   |      | $ | 19,363,500  |      |  | $ | 25,197,577 |  
|Service cost with interest                             |  |      | 1,624,129  |   |      |   | 1,708,926   |      |  |   | 2,043,529  |  
|Interest cost                                          |  |      | 988,797    |   |      |   | 1,143,801   |      |  |   | 1,315,018  |  
|Assumption changes                                     |  |      | (769,016   | ) |      |   | 3,403,226   |      |  |   | (4,064,592 | )
|Actuarial (gain)/loss                                  |  |      | 245,927    |   |      |   | (132,427    | )    |  |   | 1,664,380  |  
|Benefits paid                                          |  |      | (262,405   | ) |      |   | (289,449    | )    |  |   | (299,257   | )
|                                                       |  |      |            |   |      |   |             |      |  |   |            |  
|Benefit obligation at end of year                      |  |      | 19,363,500 |   |      |   | 25,197,577  |      |  |   | 25,856,655 |  
|                                                       |  |      |            |   |      |   |             |      |  |   |            |  
|                                                       |  |      |           
|Changes in Plan Assets                                 |  |      |            |   |      |   |             |      | 
|Fair value at beginning of year                        |  |      | 7,564,857  |   |      |   | 10,881,775  |      |  |   | 13,632,532 |  
|Actual return                                          |  |      | 1,391,001  |   |      |   | 454,266     |      |  |   | 1,174,254  |  
|Employer contribution                                  |  |      | 2,188,322  |   |      |   | 2,585,940   |      |  |   | 2,518,704  |  
|Benefits paid                                          |  |      | (262,405   | ) |      |   | (289,449    | )    |  |   | (299,257   | )
|                                                       |  |      |            |   |      |   |             |      |  |   |            |  
|Fair value at end of year                              |  |      | 10,881,775 |   |      |   | 13,632,532  |      |  |   | 17,026,233 |  
|                                                       |  |      |            |   |      |   |             |      |  |   |            |  
|Funded status                                          |  |      | (8,481,725 | ) |      |   | (11,565,045 | )    |  |   | (8,830,422 | )
|Unrecognized net obligation                            |  |      | 584,620    |   |      |   | 584,620     |      |  |   | 417,203    |  
|Unrecognized actuarial (gain)/loss                     |  |      | 7,189,412  |   |      |   | 10,855,102  |      |  |   | 7,466,293  |  
|Contributions from measurement date to fiscal year end |  |      | 867,120    |   |      |   | 419,784     |      |  |   | 619,784    |  
|Minimum liability                                      |  |      | (3,755,667 | ) |      |   | (6,702,314  | )    |  |   | (2,811,548 | )
|                                                       |  |      |            |   |      |   |             |      |  |   |            |  
|Accrued pension cost                                   |  | $    | (3,596,240 | ) |      | $ | (6,407,853  | )    |  | $ | (3,138,690 | )
|                                                       |  |      |            |   |      |   |             |      |  |   |            |  

A change in the minimum pension liability resulted in a $1,515,912 after-tax reduction of
comprehensive income in 2005 and a $2,599,640 after-tax increase in other comprehensive income in 2006.

The following table displays
FCStone Group, Inc.s plans that have accumulated benefit obligations and projected benefit obligations in excess of plan assets:



|                                |  |            |            |      |   |           
|------------------------------- |  | ---------- | ---------- | ---- | - | ----------
|                                |  | August 31,
|                                |  | 2005       |            | 2006
|Accumulated benefit obligations |  | $          | 20,460,169 |      | $ | 20,784,707
|                                |  |            |            |      |   |           
|Projected benefit obligations   |  |            | 25,197,577 |      |   | 25,856,655
|                                |  |            |            |      |   |           
|Plan assets                     |  |            | 13,632,532 |      |   | 17,026,233
|                                |  |            |            |      |   |           

The retirement benefit obligation was based upon an annual measurement date of June 30. The
following weighted-average assumptions were used to determine benefit obligations in the accompanying statements of financial condition as of August 31, 2005 and 2006:



|                                                        |  |               |   |  |               |  
|------------------------------------------------------- |  | ------------- | - |  | ------------- | -
|                                                        |  | 2005          |   |  | 2006          |  
|Weighted-average assumptions:                           |  |               |   |  |               |  
|Discount rate                                           |  | 5.25          | % |  | 6.25          | %
|Rate of compensation increasebased on age graded scale |  | 2.50% to 7.20 | % |  | 2.75% to 7.25 | %



F-15



---

FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following weighted-average assumptions were used to determine net periodic pension cost for the
years ended August 31, 2004, 2005 and 2006:



|                                                        |  |               |   |  |               |   |  |               |  
|------------------------------------------------------- |  | ------------- | - |  | ------------- | - |  | ------------- | -
|                                                        |  | 2004          |   |  | 2005          |   |  | 2006          |  
|Weighted-average assumptions:                           |  |               |   |  |               |   |  |               |  
|Discount rate                                           |  | 6.00          | % |  | 6.25          | % |  | 5.25          | %
|Expected return on assets                               |  | 8.50          | % |  | 8.50          | % |  | 8.50          | %
|Rate of compensation increasebased on age graded scale |  | 3.50% to 7.20 | % |  | 3.50% to 7.20 | % |  | 2.50% to 7.20 | %

To account for our defined benefits pension plan in accordance with SFAS No. 87, we must make
three main determinations at the end of each year: First, we must determine the actuarial assumptions for the discount rate used to reflect the time value of money in the calculation of the projected benefit obligations for the end of the current
fiscal year and to determine the net periodic pension cost for the subsequent fiscal year. For guidance in determining the rate, we look at rates of return on high-quality fixed-income investments and periodic published rate ranges.

Second, we must determine the actuarial assumption for rates of increase in compensation levels used in the calculation of the accumulated and projected
benefit obligation for the end of the current fiscal year and to determine the net periodic pension cost for the subsequent fiscal year. The salary growth assumptions reflect our long-term actual experience, the near-term outlook and assumed
inflation. Retirement and mortality rates are based primarily on actual plan experience and standard industry actuarial tables, respectively.

Third, we must determine the expected long-term rate of return on assets assumption that is used to determine the expected return on plan assets component of the net periodic pension cost for the subsequent year. The expected returned on
plan assets reflects asset allocation, investment strategy and the view of investment managers and other large pension plan sponsors.

The
expected long-term rate of return on asset assumption was determined, with the assistance of the Companys investment consultants, based on a variety of factors. These factors include, but are not limited to, the plans asset allocations,
a review of historical capital market performance, historical plan performance, current market factors such as inflation and interest rates, and a forecast of expected future asset returns. The Company reviews this long-term assumption on a periodic
basis.

The components of retirement benefit costs recognized in the consolidated statements of operations were as follows:



|                              |  |      |           |      |   |           |      |  |   |          
|----------------------------- |  | ---- | --------- | ---- | - | --------- | ---- |  | - | ---------
|                              |  | 2004 |           | 2005 |   |           | 2006
|Service cost                  |  | $    | 1,624,129 |      | $ | 1,708,926 |      |  | $ | 2,043,529
|Interest cost                 |  |      | 988,797   |      |   | 1,143,801 |      |  |   | 1,315,018
|Less: Actual return on assets |  |      | 1,391,001 |      |   | 454,266   |      |  |   | 1,174,254
|Net amortization and deferral |  |      | 1,293,586 |      |   | (79,103   | )    |  |   | 862,786  
|                              |  |      |           |      |   |           |      |  |   |          
|                              |  | $    | 2,515,511 |      | $ | 2,319,358 |      |  | $ | 3,047,079
|                              |  |      |           |      |   |           |      |  |   |          



F-16



---

FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following table sets forth the actual asset allocation for the years ended August 31, 2005
and 2006, and the target asset allocation for the Companys plan assets:



|                  |  |            |   |  |                             |   |  |           |  
|----------------- |  | ---------- | - |  | --------------------------- | - |  | --------- | -
|                  |  | August 31, |   |  | Target Asset Allocation (1) |  
|                  |  | 2005       |   |  | 2006                        |   | 
|Equity securities |  | 73         | % |  | 72                          | % |  | 65% to 75 | %
|Debt securities   |  | 27         | % |  | 28                          | % |  | 25% to 35 | %
|Total             |  | 100        | % |  | 100                         | % |  |           |  

---

|(1) | The long-term goal for equity exposure and for fixed income exposure is within the limits presented. The exact allocation at any point in time is at the discretion of the investment
manager, but should recognize the need to satisfy both the volatility and the rate of return objectives for equity exposure, and satisfy the objective of preserving capital for the fixed income exposure.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company expects to contribute approximately $2.5 million to the pension plan during 2007.

The following benefit payments, which reflect expected future service, are expected to be paid:



|            |  |                  |          
|----------- |  | ---------------- | ---------
|Fiscal Year |  | Pension Benefits
|2007        |  | $                | 405,673  
|2008        |  |                  | 485,429  
|2009        |  |                  | 581,829  
|2010        |  |                  | 702,291  
|2011        |  |                  | 851,468  
|2012  2016 |  |                  | 6,733,810

The Company participates in a 401(k) plan in the Thrift/Savings Plan for Cooperatives and the
FCStone Group Employee Stock Ownership Plan, both defined contribution plans. The Company contributed approximately $813,000, $913,000 and $1,039,000 to these plans during 2004, 2005, and 2006, respectively.



F-17



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



7. STOCK AWARD PLAN

On May 2, 2006, FCStone Group, Inc.s Board of Directors approved the FCStone Group, Inc. 2006 Equity Incentive Plan (the Plan). The Plan permits the issuance of shares of the Companys
common stock to key employees and non-employee directors, pursuant to awards granted under the Plan, such as stock options, restricted stock awards, restricted stock units and performance share awards, as well as other stock-based awards. At
August 31, 2006, 350,000 shares were available for issuance under the Plan.

Non-qualified Stock OptionsOptions granted
to date under the plan were granted at a strike price of $24.76 as determined contemporaneously by an independent valuation firm. In reliance upon such valuation and pursuant to the Plan, on June 13, 2006 the Compensation Committee of the Board
of Directors of the Company granted nonqualified stock options to purchase a total of 320,000 shares of Common Stock to executive officers and management employees of the Company and 80,000 shares of Common Stock to the non-employee directors of the
Company. The options were 100% vested on the grant date and expire on June 13, 2016. A summary of the stock option activity is as follows:



|                           |  |                     |  |                                  |       |                     |         |                                  |   |      
|-------------------------- |  | ------------------- |  | -------------------------------- | ----- | ------------------- | ------- | -------------------------------- | - | -----
|                           |  | Options Outstanding |  | Weighted- Average Exercise Price |       | Options Exercisable |         | Weighted- Average Exercise Price
|Balance at August 31, 2005 |  |                    |  |                                  |      |                     |        |                                  |   |     
|Options granted            |  | 400,000             |  | $                                | 24.76 |                     |         |                                  |   |      
|Options exercised          |  |                    |  |                                  |      |                     |         |                                  |   |      
|Options forfeited          |  |                    |  |                                  |      |                     |         |                                  |   |      
|                           |  |                     |  |                                  |       |                     |         |                                  |   |      
|Balance at August 31, 2006 |  | 400,000             |  | $                                | 24.76 |                     | 400,000 |                                  | $ | 24.76
|                           |  |                     |  |                                  |       |                     |         |                                  |   |      

Information regarding options outstanding at August 31, 2006 was as follows:



|                         |  |                     |  |                                |  |                                                              |  |         |  |                               
|------------------------ |  | ------------------- |  | ------------------------------ |  | ------------------------------------------------------------ |  | ------- |  | ------------------------------
|                         |  | Options Outstanding |  | Options Exercisable           
|Range of Exercise Prices |  | Options             |  | Weighted AverageExercise price |  | Weighted Average Remaining        Contractual Life(in years) |  | Options |  | Weighted AverageExercise price
|$24.76                   |  | 400,000             |  | $24.76                         |  | 9.79                                                         |  | 400,000 |  | $24.76                        

No options were granted during fiscal years 2004 and 2005. The value of the options granted during
2006 was determined under the minimum value method using a Black-Scholes pricing model and the significant assumptions used in this model were as follows:



|                                         |  |      |         |  
|---------------------------------------- |  | ---- | ------- | -
|                                         |  | 2006 |        
|Value of options                         |  | $    | 0.30    |  
|Volatility                               |  |      | 0.00    | %
|Risk free interest rate                  |  |      | 4.95    | %
|Expected life                            |  |      | 5 years |  
|Expected dividend yield on date of grant |  |      | 4.6     | %

Total stock-based compensation expense related to options issued to executive officers and
management employees of the Company and non-employee directors of the Company under the minimum value method was $120,000 in the year ended August 31, 2006.



F-18



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



8. ADJUSTED NET CAPITAL REQUIREMENTS

Pursuant to the rules, regulations, and requirements of the Commodity Futures Trading Commission and other regulatory agencies, FCStone is required to
maintain certain minimum net capital as defined in such rules, regulations, and requirements. Net capital and the related net capital requirement may fluctuate on a daily basis. FCStones adjusted net capital and minimum net capital requirement
at August 31, 2005 and 2006 were as follows:



|                                |  |      |            |      |   |           
|------------------------------- |  | ---- | ---------- | ---- | - | ----------
|                                |  | 2005 |            | 2006
|Adjusted net capital            |  | $    | 24,935,736 |      | $ | 31,311,896
|Minimum net capital requirement |  | $    | 17,480,009 |      | $ | 21,869,555

The rules, regulations, and requirements of the Commodity Futures Trading Commission prohibit the
withdrawal of equity if, after giving effect to such withdrawal and capital reductions which are scheduled to occur within six months, adjusted net capital is less than the greater of 120% of the minimum financial requirements of the CFTC or any
self-regulatory organization of which FCStone is a member.

FCC Investments, Inc. is required to maintain certain net capital as defined by
the Securities and Exchange Commission. At August 31, 2005 and 2006, FCC Investments net capital was $385,603 and $434,561, respectively. The minimum net capital requirement was $250,000 at August 31, 2005 and 2006, respectively.

9. COMMITMENTS

FCStone leases office
space, equipment, automobiles, and an airplane under noncancelable operating leases which expire on various dates through 2012. Most of the leases provide that FCStone pay taxes, maintenance, insurance, and other expenses. At August 31, 2006,
minimum rental payments due under operating leases were approximately as follows: 2007, $1,973,000; 2008, $1,697,000; 2009, $1,111,000; 2010, $650,000; and 2011 and beyond, $2,352,000.

The rental expense under the above operating leases was approximately $1,862,000, $2,290,000 and $2,361,000, in 2004, 2005 and 2006, respectively.

FCStone Financial leases covered hopper cars and, in turn, subleases these cars to a railroad company. The lease renewed for a three-year
period effective October 1, 2005, and has been classified as an operating lease. Rental expense, excluding mileage credits and maintenance costs, under this lease totaled approximately $642,000, $656,000, and $1,066,000 in 2004, 2005 and 2006,
respectively. Future minimum lease payments under this operating lease are approximately $1,106,000 in 2007; $1,106,000 in 2008; and $92,000 in 2009. The sublease also was renewed on a cancelable basis for a three year period effective
October 1, 2005. Sublease rental income, excluding mileage credits and maintenance costs, totaled approximately $830,000, $831,000, and $1,188,000 in 2004, 2005 and 2006, respectively. Future minimum lease payments expected to be received under
the sublease subsequent to August 31, 2006 are approximately $1,222,000 in 2007; $1,222,000 in 2008; and $102,000 in 2009.

FGDI is
party to a capital lease agreement for grain bins in Mobile, Alabama. The capitalized asset was placed into service during September, 2005 and is being depreciated over the lease term. FGDI made payments on the lease equal to $687,500, $550,000, and
$550,000 during 2004, 2005 and 2006, respectively. In addition, the Company pays interest on the Industrial Development Revenue Bonds which amounted to approximately $91,000, $82,000, and $92,000 in 2004, 2005, and 2006, respectively. The lease
expires December 1, 2012 and annual minimum lease payments are equal to $550,000.



F-19



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



FGDI also leases grain storage facilities under various operating leases with expiration dates
ranging from August 31, 2005 through September 30, 2013. The terms of the operating lease for grain facilities in Mobile, Alabama, require an annual lease commitment of $800,000, which is included in the future minimum rental payments
below. Payment of the annual lease amount, or a portion thereof, must be made in the instances where annual rail service and dockage income collected by the lessor, relating to the facilities volume of grain bushels handled, does not cover the
annual lease amount. Additionally, the minority owner of FGDI has agreed to load a certain minimum number of bushels through the facility. Cash receipts by the lessor, associated with elevation of the member bushels, have been adequate to fund the
minimum lease payment for the years ending August 31 2004, 2005 and 2006.

FGDI leases covered hopper cars for use in its Ohio
operations under various operating leases from unrelated parties, with term ranging from twelve to sixty months. Rental expenses under these leases, which are included in cost of commodities sold, totaled approximately $2,000,000, $2,800,000, and
$3,200,000 in 2004, 2005 and 2006, respectively.

FGDIs approximate future minimum rental payments for the above facilities and
railcars for subsequent fiscal years are approximately as follows: 2007, $4,639,000; 2008, $3,903,000; 2009, $2,600,000; 2010, $2,110,000; and 2011, $1,647,000.

FGDI leases various office space and grain storage facilities under year-to-year operating leases. Rental expense for these offices and facilities was approximately $415,000, $542,000, and $609,000 in 2004, 2005 and
2006, respectively. FGDI also rents equipment periodically throughout the year under day-to-day agreements. Rent expense for equipment and machinery was approximately $48,000, $51,000, and $64,000 in 2004, 2005 and 2006, respectively.

In the event the counterparty is unable to meet its contractual obligations, FCStone Trading may be exposed to the risk of purchasing energy related
products at prevailing market prices. To mitigate this risk, FCStone Trading has purchased credit default swaps and credit insurance that provides some coverage against counterparty risk. FCStone Trading records the insurance or premium paid for
swaps as a prepaid asset, which is amortized over the life of the policy or contract. At August 31, 2005 and 2006, FCStone Trading held 13 and 14 credit default swaps with a reported value of $196,752 and $125,893, respectively. The fair value
of these swaps at August 31, 2005 and 2006 was consistent with the amounts reported. FCStone Trading has not experienced any significant recoveries under these arrangements in 2004, 2005, or 2006. Customer credit risk is mitigated through the
collection of margin deposits.

During 2006, FCStone Trading entered into offsetting contracts with two parties to acquire and deliver fuel
under a fixed price arrangement. FCStone Trading does not take possession of the fuel and recognizes a margin on the purchase and sale at each delivery date.

FCStone Merchant Services has a noncancelable operating lease for office space in New Jersey. The lease is for an initial three year term expiring on June 30, 2007. The lease contains a renewal option for an
additional five year term and requires payment of all executory costs, such as maintenance and liability insurance. Rent expense associated with this lease totaled approximately $66,000 and in 2005 and 2006, respectively. Future minimum lease
payments under the lease for the years subsequent to August 31, 2006 are $55,000.



F-20



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



10. STOCKHOLDERS EQUITY

On March 1, 2005, the voting stockholder/members of the Company approved the restructuring of the Company by terminating the Companys cooperative status and ending the patronage-based rights accruing to the
Companys members. Pursuant to the restructuring, stockholders and subscribers received on April 15, 2005, 500 shares of new common stock for each fully-paid share of Class A common stock, $5,000 par value, 10,000 shares of new common
stock for each fully-paid share of Class B common stock, $100,000 par value, one share of new common stock for each $10.00 of paid subscription and one share of new common stock for each $10.00 par value of preferred stock held. Membership interests
in the Company represented by patronage-based rights as of August 31, 2004, were converted on April 15, 2005 into (i) shares of new common stock based on an appraised value and relative patronage; and (ii) subscription rights
exercisable at a purchase price of $10.00 per share within 60 days after the distribution of new common stock and subscription rights. The Company distributed 4,310,237 shares of new common stock on April 15, 2005 pursuant to the restructuring.
The Company commenced the subscription rights offering on April 15, 2005 and the offering continued until June 29, 2005 with 174,372 shares sold and $1,743,720 of equity raised.

In June 2005, the Company formed an employee stock ownership plan (ESOP) and filed a Form S-8 Registration Statement in order to provide employee
incentives and an additional capital infusion to the Company. Generally, employees of the Company or any participating affiliates who meet the criteria defined in the ESOP are eligible. Eligible participants were able to elect to make a one-time
irrevocable transfer of a portion of their 401(k) Plan to the ESOP. The amount of the transfer was limited to no more than one-third (1/3) of the eligible participants 401(k) Plan account balance. The ESOP intends to operate on a plan
year which corresponds to the calendar year. For plan years beginning after December 31, 2005, the Company will make matching contributions to the ESOP in an amount equal to 50% of each participants eligible elective deferral contribution
to the 401(k) Plan. Dividends received with respect to shares of Company Stock allocated to participants accounts in the ESOP will be credited to such participants accounts annually on the basis of the number of shares of Company Stock
allocated to each such participants account. The initial ESOP stock sale was consummated as of August 26, 2005, with the ESOP purchasing from the Company 448,692 shares of common stock at a purchase price of $10.00 per share, for an
aggregate of $4,486,920. All shares held by the ESOP are treated as outstanding in computing earnings per share. In the event a terminated plan participant, whether by death, disability, retirement or other termination, desires to sell his or her
shares of Company stock, the Company may be required to purchase the shares from the participant at their appraised value at that time. To the extent that shares of common stock held by the ESOP are not readily tradeable, a sponsor must reflect the
maximum cash obligation related to those securities outside of stockholders equity as temporary equity.

As of August 31, 2005
and 2006, the shares held by the ESOP, fair value and maximum cash obligation were as follows:



|                        |  |      |           |      |   |          
|----------------------- |  | ---- | --------- | ---- | - | ---------
|                        |  | 2005 |           | 2006
|Shares held by the ESOP |  |      | 448,692   |      |   | 466,149  
|Fair value per share    |  | $    | 10.00     |      | $ | 13.04    
|Maximum cash obligation |  | $    | 4,486,920 |      | $ | 6,078,583

On August 15, 2005, we purchased 103,922 shares of the common stock of the Company held by
Farmland Industries pursuant to an auction held by Farmlands liquidating trustee and the approval of the bankruptcy court. The aggregate purchase price for the purchase of these shares was $605,000, or $5.82 per share. We do not have a plan or
program for the purchase of shares of the Companys common stock.



F-21



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



11. NOTES PAYABLE

Notes payable outstanding at August 31, 2005 and 2006 consisted of the following:



|                                    |  |                          |  |                  |       |                                  |   |            |  |   |           
|----------------------------------- |  | ------------------------ |  | ---------------- | ----- | -------------------------------- | - | ---------- |  | - | ----------
|                                    |  | Renewal /Expiration Date |  | Amount Available |       | Amount Outstanding at August 31,
|                                    |  |                          |  | 2005             |       | 2006                            
|                                    |  |                          |  | (in millions)    |       |                                  |   |           
|Margin Call Facilities:             |  |                          |  |                  |       |                                  |   |            |  |   |           
|Deere Credit, Inc.                  |  | March 1, 2007            |  | $                | 36.75 |                                  | $ |           |  | $ |          
|Harris, N.A.                        |  | January 31, 2007         |  |                  | 35.0  |                                  |   |           |  |   |          
|CoBank, ACB                         |  | December 31, 2007        |  |                  | 20.0  |                                  |   |           |  |   |          
|Commodity Merchandising Facilities: |  |                          |  |                  |       |                                  |   |            |  |   |           
|CoBank, ACB                         |  | December 31, 2007        |  |                  | 68.0  |                                  |   | 6,004,545  |  |   | 20,992,636
|AFG Trust Finance Limited           |  | May 25, 2007             |  |                  | 8.0   |                                  |   | 3,586,792  |  |   | 4,057,937 
|Commodity Financing Facilities:     |  |                          |  |                  |       |                                  |   |            |  |   |           
|Deere Credit, Inc.                  |  | March 1, 2007            |  |                  | 96.0  |                                  |   | 17,778,000 |  |   | 7,100,000 
|CoBank, ACB                         |  | May 1, 2007              |  |                  | 75.0  |                                  |   | 4,833,000  |  |   | 3,405,000 
|Fortis Capital Corp.                |  | Demand                   |  |                  | 20.0  |                                  |   |           |  |   | 1,116,000 
|RZB Finance, LLC                    |  | Demand                   |  |                  | 8.0   |                                  |   |           |  |   | 1,068,000 
|Bank of Tokyo-Mitsubishi UFJ, Ltd   |  | Demand                   |  |                  | 10.0  |                                  |   |           |  |   |          
|Standard Chartered Bank, New York   |  | Demand                   |  |                  | 20.0  |                                  |   |           |  |   |          
|Other borrowings:                   |  |                          |  |                  |       |                                  |   |            |  |   |           
|Deere Credit, Inc.                  |  | October 1, 2009          |  |                  | 10.25 |                                  |   | 4,250,000  |  |   | 10,250,000
|Long-term Note                      |  | December 31, 2012        |  |                  | 0.5   |                                  |   | 458,550    |  |   | 179,452   
|                                    |  |                          |  |                  |       |                                  |   |            |  |   |           
|Total                               |  |                          |  |                  |       |                                  | $ | 36,910,887 |  | $ | 48,169,025
|                                    |  |                          |  |                  |       |                                  |   |            |  |   |           

Margin Call Facilities

FCStone has an unsecured line of credit with Deere Credit, Inc. (Deere Credit) to be used for margin calls, if necessary. The margin call line of credit is subject to annual review, and continued availability of this
line of credit is subject to the Companys financial condition and operating results continuing to be satisfactory to Deere Credit. Borrowings under this line are on a demand basis and bear interest at 0.35% under the Prime rate or base rate of
interest established by Citibank, N.A. Unused portions of the credit facility require a commitment fee of .15% on the unused commitment.

FCStone has unsecured lines of credit with Harris, N.A. (Harris) to be used for margin calls and commodity
deliveries, if necessary. These lines of credit are subject to annual review and continued availability of these lines are subject to FCStones financial condition and operating results continuing to be satisfactory to Harris. Borrowings under
this line are on a demand basis and bear interest at the prime rate as announced by Harris. Unused portions of the credit facility require a commitment fee of 1/4% on the unused commitment. Effective June 30, 2006, the amount available to borrow from Harris has been increased from $20,000,000 to $35,000,000 through December 31,
2006.

On January 25, 2006, FCStone Trading entered into a new master loan agreement with CoBank, ACB (CoBank). The agreement
includes a revolving credit facility in the amount up to $10,000,000, which expires on December 30, 2006. Additionally, the agreement includes a revolving term loan in the amount up to $10,000,000, which expires on December 30, 2007. The
purpose of these facilities is to provide funding for commodities risk management consulting services that FCStone Trading provides to its customers, primarily the payment of option



F-22



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



premiums and margin calls on hedge and swap transactions entered into by the FCStone Trading on behalf of customers. Additionally, the revolving term loan
provides funding for the issuance of letters of credit required by and for the benefit of certain swap transaction counterparties. Amounts outstanding under these credit facilities will bear interest at a rate of 1/4 of 1% below the National
Variable Rate established by CoBank from time to time. Unused portions of the credit facility require a commitment fee of 1/4% on the unused commitment. The agreement contains financial covenants related to current assets in excess of current liabilities and total assets in excess of total liabilities, as defined. The loan agreement requires Trading to
acquire and maintain nonvoting participation certificates in CoBank in amounts determined in accordance with CoBanks bylaws and capital plan. These certificates are reported as investments in other organizations.

Commodity Merchandising Facilities

On
March 28, 2006, the FGDI entered into a new master loan agreement with CoBank. The agreement includes a revolving credit facility for an amount of up to $68,000,000, to be used to finance inventory and receivables. The commitment expires
March 28, 2007 and carries an interest rate on a variable basis indexed to LIBOR, as defined in the agreement, which was 7.56% at August 31, 2006. The agreement also includes a revolving term loan for an amount of up to $8,000,000, to be
used to reimburse CoBank for any drafts that it may honor under issued letters of credit. The commitment expires March 28, 2008 and carries an interest rate on a variable basis indexed to LIBOR, as defined in the agreement. The credit facility
and the term loan are secured by inventories, accounts receivable, and intangible properties. The agreements financial covenants include a minimum current ratio, a minimum net worth, and a maximum debt to adjusted working capital ratio.
Additionally, FGDI is required to have at the end of each fiscal year, a minimum Fixed Charge Coverage Ratio. The FGDI was not in compliance with the annual fixed charge coverage ratio at August 31, 2006, but received a written
waiver from CoBank for the fiscal year ended August 31, 2006. Unused portions of the credit facility require a commitment fee of .50% on the unused commitment. The loan agreement requires FGDI to acquire and maintain nonvoting participation
certificates in CoBank in amounts determined in accordance with CoBanks bylaws and capital plan. These certificates are reported as investments in other organizations.

On September 18, 2006, FGDI renewed its agreements with AFG Trust Finance Limited and AFG Trust Assets Limited for a United States dollar (USD)
credit facility and a Chinese RenMinBi (RMB) credit facility, as well as an USD investment facility and a RMB investment facility. The USD credit facility carries an interest rate of the aggregate of the prime rate, as published by The Asian Wall
Street Journal and .75% per annum, which was 9.0% at August 31, 2006. The credit facility is secured by all of the interest and rights in respect of the USD and RMB investment facilities with AFG Trust Assets Limited. The aggregate
principal amounts of all the borrowings outstanding shall not exceed the lesser of the facility amount and the available limit, to be calculated as defined

in the agreement. There are no commitment fees associated with this line of credit and there have been no borrowings outstanding under the RMB credit facility.

Commodity Financing Facilities

On February 23, 2006, FCStone Financial amended its
uncommitted line of credit agreement with Deere Credit, increasing the available amount to $96.0 million. The commitment expires on March 1, 2007, at which time it is FCStone Financials intent to renew this agreement. The line of credit
carries an interest rate on a variable basis calculated based on the collateral quality of advances requested by FCStone Financial as defined in the agreement, which ranged from 7.50% to 8.25% at August 31, 2006. The line of credit is secured
by inventories and accounts receivable. The agreement contains financial covenants related to current assets in excess of current liabilities and total assets in excess of total liabilities. FCStone Financial was in compliance with these
requirements at August 31, 2006. In addition, FCStone Financial must obtain a Guaranty from FCStone Group, Inc. to meet minimum net worth levels at the end of each month and fiscal year. The Company



F-23



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



maintains a limited corporate guarantee with Deere Credit to meet this obligation. There are no commitment fees associated with this line of credit.

On February 28, 2003, FCStone Financial entered into an uncommitted line of credit agreement with CoBank, ACB. The commitment expires
on April 30, 2007, at which time it is FCStone Financials intent to renew this agreement. Interest under the agreement will be determined separately at the time advances are requested by FCStone Financial. At August 31, 2006, the
line of credit was bearing interest at 7.46%. Under a subordination agreement dated February 28, 2003, borrowings under the line of credit with Deere Credit, discussed above, are subordinate to those under the line of credit with CoBank. The
agreement contains financial covenants related to equity. FCStone Financial was in compliance with this requirement in 2006. In addition, the Company maintains a guarantee of payment agreement with CoBank with a maximum obligation of $1.5 million.
The loan agreement requires FCStone Financial to acquire and maintain nonvoting participation certificates in CoBank in amounts determined in accordance with CoBanks bylaws and capital plan. These certificates are reported as investments in
other organizations. There are no commitment fees associated with this line of credit.

FCStone Merchant Services has an uncommitted line
of credit agreement with RZB Finance (RZB) in the amount of $8.0 million, to be used for short term advances (Loans) and issuance of commercial letters of credit (L/Cs). The Loans and L/Cs shall be used to finance the purchase of
inventory, by FCStone Merchant Services or by their customers, from suppliers and accounts receivable arising from the sale of inventory. FCStone Merchant Services has executed and delivered to RZB a general security agreement and related UCC 1
financing statements granting RZB a first priority perfected lien on all personal property of FCStone Merchant Services. Each Loan is payable on demand, and in no event shall be outstanding for more than 180 days. Loans under the facility bear
interest at a variable rate determined in accordance with the terms of the agreement. At August 31, 2006, the line of credit was bearing interest at an annual rate of 8.0%. The fees for issuing L/Cs under the facility are determined in
accordance with the terms of the agreement, with a minimum fee of $500. The agreement contains financial covenants related to FCStone Merchant Servicess tangible net worth, as defined. FCStone Merchant Services was in compliance with the
requirement at August 31, 2006. No commitment fees were paid in 2006 under this facility.

FCStone Merchant Services has an
uncommitted line of credit agreement with Fortis Capital Corp. (Fortis) in the amount of $20.0 million, to be used for loans and documentary and standby letters of credit (L/Cs). Each loan or L/C shall be used to finance self liquidating
transactions involving the purchase, storage, hedging, and sale of grains, crude oil, natural gas, and petroleum products that are traded on commodities exchanges, as well as, repurchase agreements with counterparties acceptable to Fortis. FCStone
Merchant Servicess obligation to Fortis is secured by a perfected security interest in all personal property and fixtures of FCStone Merchant

Services. All loans are payable on demand, and in no event shall be outstanding for more than 74 days, unless agreed by Fortis. Loans under the facility bear interest at a variable rate determined in accordance with the terms of the
agreement. At August 31, 2006, the line of credit was bearing interest at an annual rate of 7.71%. The fees for issuing documentary L/Cs under the facility are determined in accordance with the terms of the agreement, with a minimum fee
of $500. The fees for issuing trade and financial standby L/Cs shall be not less than a fee at a rate of 2.0% and 2.50%, respectively, of the daily average maximum undrawn face amount outstanding. The agreement contains financial covenants
related to FCStone Merchant Servicess working capital and ratio of total outstanding loans and extensions of credit from all banks and institutions to tangible net worth, as defined. FCStone Merchant Services was in compliance with the
requirements at August 31, 2006. No commitment fees were paid in 2006 under this facility.

FCStone Merchant Services has an
uncommitted line of credit agreement with Bank of Toyko-Mitsubishi UFJ, Limited (BTMU) in the amount of $10.0 million, to be used for loans and commercial and standby letters of credit (L/Cs). Each loan or L/C shall be used to finance self
liquidating transactions involving the purchase,



F-24



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



storage, hedging, and sale of grains, crude oil, natural gas, and petroleum products that are traded on commodities exchanges, as well as, repurchase
agreements with counterparties acceptable to BTMU. The facility is secured by a first priority lien on the inventory, accounts receivable, hedge contracts, and the proceeds from the specific commodity transaction financed. All loans are payable on
demand, and in no event shall be outstanding for more than 364 days. Loans under the facility bear interest at a variable rate determined in accordance with the terms of the agreement. The fees for issuing commercial L/Cs under the facility
are determined in accordance with the terms of the agreement, with a minimum fee of $500. The fees for issuing standby L/Cs under the facility are determined in accordance with the terms of the agreement, with a minimum fee of $250 for each
ninety day period outstanding. No commitment fees were paid in 2006 under this facility.

FCStone Merchant Services has an uncommitted
revolving credit facility agreement with Standard Chartered Bank, New York in the amount of $20.0 million, to be used for short term loans, the issuance of documentary and standby letters of credit, and letters of indemnity. Each loan or letter of
credit shall be used to finance physical commodity transactions, including grains and energy products. The facility is secured by a first priority lien on the inventory, accounts receivable, hedge contracts, and the proceeds from the specific
commodity transaction financed. All loans are payable on demand, and in no event shall be outstanding for more than ninety days, with provisions for rollovers if necessary. Loans under the facility bear interest at a variable rate determined in
accordance with the terms of the agreement. The fees for issuing documentary and standby letters of credit under the facility are determined in accordance with the terms of the agreement, with a minimum of $500. The agreement contains financial
covenants related to FCStone Merchant Servicess tangible net worth, minimum working capital and maximum total leverage, as defined. FCStone Merchant Services was in compliance with the requirements at August 31, 2006. No commitment fees
were paid in 2006 under this facility.

Other Borrowings

The Company has a general corporate unsecured line of credit agreement with Deere Credit. The availability of this line of credit is subject to the Companys financial condition and operating results continuing
to be satisfactory to Deere Credit. Borrowings under this line are on a demand basis and bear interest at a rate equal to 2.90% in excess of the LIBOR rate, as defined in the agreement. At August 31, 2006, the line of credit was bearing
interest at 8.29%. Unused portions of the credit facility require a commitment fee of .50% on the unused commitment.

FCStone has an
installment note payable to an individual, due $5,750 per month, including interest at a rate equal to 1.75% in excess of the Fed Funds rate as reported by the Wall Street Journal, with final payment due in December 2012. At August 31, 2006,
the note was bearing interest at 7.01%. Payments required to be made on the installment note during the fiscal years ending 2007 through 2009 are $69,000, $69,000, and $41,452, respectively.

12. LETTERS OF CREDIT

FCStone Trading is required to
provide letters of credit to certain customers and counterparties that can be drawn upon if there is a loss on the over-the-counter contracts. FCStone Trading has provided several letters of credit, under agreements with CoBank, in the aggregate
amount of $7,375,000, with maturity dates that ranged from September 30, 2004 to September 30, 2006. To date, no counterparties have drawn down on these facilities. The agreements require commitment fees paid in advance, which are recorded
as prepaid expenses and recognized over the life of the respective letter of credit. At August 31, 2006, FCStone Trading had $2,526,110 of cash restricted to collateralize a standby letter of credit with Harris in favor of a counterparty.

During 2003, the City of Mobile, Alabama, issued $5,500,000 of Industrial Development Revenue Bonds (Bonds) related to the construction of
grain bins (see note 9), of which $3,575,000 remains outstanding. FGDI is



F-25



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



required to maintain a bank letter of credit in the amount of approximately $4,000,000, which expires on August 31, 2006, subject to required renewal,
to secure the Bonds. FGDI agrees to pay a standby letter of credit fee, payable annually and charged to interest expense ratably.

FCStone
Merchant Services provides credit support on behalf of certain customers using arrangements such as documentary and standby letters of credit (see note 11). These arrangements enable customers to execute transactions or obtain desired financial
arrangements with third parties. Should the customer fail to perform under the terms of the transaction or financing arrangement, FCStone Merchant Services would be required to perform on their behalf. The length of these credit support arrangements
parallels the length of the related financing arrangements or transactions. FCStone Merchant Services has issued letters of credit in the amount of $7,417,000 and $10,394,180 at August 31, 2005 and 2006, respectively.

13. SUBORDINATED DEBT

FCStone has an unsecured subordinated debt line of credit with Deere Credit in the amount of $7,000,000 million. The subordinated revolving line of credit bears interest at the rate of 4.8% in excess of LIBOR, which was 10.19% at
August 31, 2006. Unused portions of the credit facility require a commitment fee of 1/2percent on the
unused commitment. Borrowings outstanding under this line of credit were $4,000,000 and $6,000,000 at August 31, 2005 and 2006, respectively.

FCStone has several subordinated notes with various individuals, amounting to $1,500,000 and $1,000,000 at August 31, 2005 and 2006, respectively (see note 15). The notes are variable rate notes, and bear
interest at a rate equal to the prime rate as published in The Wall Street Journal, which was 8.25% at August 31, 2006. The notes mature on dates ranging from December 31, 2006 through June 30 2007, and are subordinated as
defined by Commodity Futures Trading Commission Regulations.

14. CONTINGENCIES

The Company, from time to time, is involved in various legal matters considered normal in the course of its business. It is the Companys policy to
accrue for amounts related to these matters if it is probable that a liability has been incurred and an amount can be reasonably estimated. Although the outcome of such matters cannot be predicted with certainty and no assurances can be given with
respect to such matters, the Company believes that the outcome of these matters in which it is currently involved will not have a materially adverse effect on its results of operations, liquidity, or financial position except as discussed below.

During 2004, FCStone LLC received approximately $600,000 in subrogation payments which were reimbursements for legal expenses incurred in
previous years. Such amounts are reflected as a reduction of other expenses in the accompanying statement of operations.

On
August 21, 2003, August 21, 2003, September 23, 2003, October 16, 2003, and July 16, 2004, Euro-Maritime Chartering, Inc. filed five separate claims under the arbitration facility established by the London
Maritime Arbitrators Association of London, England, alleging a breach by FGDI of charter party agreements regarding five vessels and seeking to recover damages of $242,655, $230,863, $769,302, $649,031 and $403,167, respectively. Euro-Maritime
Chartering alleges that these damages arise from detention and demurrage encountered at China ports with respect to cargos that FGDI sold to Chinese buyers. FGDI does not dispute the demurrage claims, which are estimated to total approximately
$690,000. FGDI claims that, under the sales contracts with the Chinese buyers, any detention and demurrage charges were for the account of the buyers. FGDI has collected deposits from the Chinese buyers in the total amount of $669,436, which are
being held pending resolution of the detention claims. FGDI intends to vigorously defend the detention claims and believes



F-26



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



that it has meritorious defenses. If the claimant prevails on any of the detention claims, or otherwise in amounts above the corresponding deposit, FGDI
expects to seek collection of such amounts from the buyers.

On December 13, 2003, Liaoyang Edible Oils filed a claim in arbitration
under the arbitration facility established by the Federation of Oils, Seeds and Fats Associations Ltd. of Hong Kong alleging a breach of a sales contract by FGDI and seeking to recover damages of $1,125,000, of which $55,475 was not disputed as due
under the contract. Liaoyang Edible Oils alleged that these damages arose out of disputes related to the final pricing of the contract. On December 15, 2005 the arbitration panel rendered a decision, dismissing the claim for pricing damages,
but also doing its own accounting under the contract, and making an award to claimant, including interest and arbitration costs, of approximately $275,000. A partial award of attorneys fees and costs was also rendered in the decision, although
this amount is yet to be quantified. FGDI has made an accrual related to this claim, based on current estimates. On January 25, 2006, the claimant filed an appeal, which under the arbitration rules governing this dispute, is deemed to be a
request for a new hearing. FGDI intends to defend the appeal and seek an order that the award be upheld in its entirety, except for the accounting amount and except that each party should be ordered to bear its own legal costs. In addition, FGDI has
cross appealed as to the amount determined by the arbitration panel.

On December 9, 2004, Xiamen Zhonge Industry Co., Ltd. (Xiamen)
filed a claim in arbitration under the arbitration facility established by the Federation of Oils, Seeds and Fats Associations Ltd. of Hong Kong. Xiamens claim alleges that FGDI breached its duty to accept pricing instructions provided by
Xiamen to FGDI. FGDI submitted a statement of defense and counterclaim to which Xiamen replied with a modified claim. The matter is now fully submitted and is awaiting decision.

On May 23, 2006, a former customer, Watseka Farmers Grain Cooperative Company, filed an action in the United States District Court, Central District
of Illinois seeking actual damages, interest, punitive damages and general relief relating to losses on allegedly improper speculative trades ordered by the former general manager of the customer in a commodity futures account at FCStone, LLC. The
customer was placed under supervision by Illinois state authorities in May 2004, after examination revealed deficiencies in its financial reporting and condition, and its assets were subsequently sold. We intend to vigorously defend this claim.

Management is currently unable to predict the outcome of these claims and, except as noted above, believes their current status does not
warrant accrual under the guidance of Statement on Financial Accounting Standards No. 5, Accounting for Contingencies, since the amount of any liability is neither probable nor reasonably estimable. As such, except as noted above, no
amounts have been accrued in the financial statements. Management intends to vigorously defend these claims and will continue to monitor the result of arbitration and assess the need for future accruals.

15. ACCOUNTS RECEIVABLE

During 2006, an FGDI
customer located in Alabama declared bankruptcy. Assets were sold through a court administered auction. FGDI is uncertain as to the amount of its receivable that it can collect from this customer and has reserved the entire balance receivable
through a $1.1 million charge to bad debt expense in 2006.

An FGDI customer located in Mexico failed to make timely payment on accounts
owed to the Company in the amount of $2.9 million. Although this customer has subsequently provided a mortgage on real estate located in Mexico, based on available information, it appears probable that the Company will be unable to collect the
amount due. As a result, the Companys loss from this default is approximately $2.9 million, which has been recognized as a charge to bad debt expense during fiscal 2005. During November 2004, an FGDI customer located in Mexico failed to make
timely payment on its receivables. As a result, the Companys loss from this



F-27



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FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



non payment default was $1.0 million. The Company recognized the loss through a $0.7 million charge to bad debt expense during fiscal 2005, in addition to
$0.3 million previously recorded for this matter.

16. TRANSACTIONS WITH AFFILIATED COMPANIES

FCStone has entered into an agreement with FCTC to provide management services, including accounting, administrative, personnel, and office space. The
Company receives a monthly fee plus 15% of net earnings of FCTC, which totaled approximately $207,000, $231,000, and $359,704 in 2004, 2005 and 2006, respectively.

The Company loaned monies to individuals who subsequently loaned the monies in the form of subordinated debt to FCStone, creating a financial interest which is required to enable FCStone to execute transactions
through exchange membership seats held by these individuals on the Chicago Mercantile Exchange. At August 31, 2005 and 2006, $1,000,000 was outstanding under this arrangement, respectively.

17. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying
value of cash and cash equivalents, commodity and accounts and note receivables, marketable securities and payables contained in the Consolidated Statements of Financial Condition approximates their fair values due to the short-term nature of these
instruments. Short-term borrowings and obligations under capital lease have variable rates which approximate fair value.

The fair value
estimates presented herein are based on pertinent information available to management as of August 31, 2005 and 2006. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts
have not been comprehensively revalued for purposes of these financial statements since that date, and current estimates of fair value may be different significantly from the amounts presented herein.

18. OPERATING SEGMENT INFORMATION

The Company
reports its operating segments based on services provided to customers, which includes Commodity and Risk Management Services, Clearing and Execution Services, Grain Merchandising, and Financial Services. The Commodity and Risk Management Services
segment offers commodity services to its customers, with an emphasis on risk management using futures, options, and other derivative instruments. The Clearing and Execution Services segment offers low-cost clearing and direct execution services to
commodities firms, fund operators, commodities traders and others. The Grain Merchandising segment acts as a dealer in, and manager of, physical grain and fertilizer in the United States and international markets. The Financial Services segment
offers financing and facilitation for customers to carry grain and other commodities.

The accounting policies of the segments are the same
as those described in the summary of significant accounting policies. The Company evaluates individual segment performance based on segment income or loss defined as the respective segments portion of the total Companys income before
taxes and minority interest.

Reconciling Amounts represent the elimination of interest income and expense, and commission income and
expense between segments. Such transactions are conducted at market prices to more accurately evaluate the profitability of the individual business segments. Additionally, certain assets consisting primarily of commodity deposits and accounts
receivable, notes receivable, and amounts due from affiliates between segments have been eliminated.



F-28



---

FCSTONE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following table represents the significant items by operating segment for the results of
operations for the years ended August 31, 2004, 2005, and 2006, respectively:



|                                                              |  |                                   |         |                            |   |                    |  |   |                   |   |  |                  |        |   |                    |   |        |       |  |   |         |   |  |   |          
|------------------------------------------------------------- |  | --------------------------------- | ------- | -------------------------- | - | ------------------ |  | - | ----------------- | - |  | ---------------- | ------ | - | ------------------ | - | ------ | ----- |  | - | ------- | - |  | - | ---------
|                                                              |  | Commodity& RiskManagementServices |         | Clearing&ExecutionServices |   | GrainMerchandising |  |   | FinancialServices |   |  | Corporate& Other |        |   | ReconcilingAmounts |   |        | Total
|                                                              |  | (in thousands)                   
|2004                                                          |  |                                   |         |                            |   |                    |  |   |                   |   |  |                  |        |   |                    |   |        |       |  |   |         |   |  |   |          
|Total revenues                                                |  | $                                 | 156,122 |                            | $ | 40,484             |  | $ | 1,426,846         |   |  | $                | 2,517  |   |                    | $ | 80     |       |  | $ | (1,735  | ) |  | $ | 1,624,314
|                                                              |  |                                   |         |                            |   |                    | 
|Interest revenues                                             |  |                                   | 1,345   |                            |   | 1,412              |  |   | 68                |   |  |                  | 1,519  |   |                    |   | 10     |       |  |   | (372    | ) |  |   | 3,982    
|Interest expense                                              |  |                                   | 114     |                            |   | 193                |  |   | 3,168             |   |  |                  | 1,262  |   |                    |   | 53     |       |  |   | (372    | ) |  |   | 4,418    
|Income (loss) before minority interest and income tax expense |  |                                   | 7,907   |                            |   | 3,359              |  |   | 2,230             |   |  |                  | (447   | ) |                    |   | (4,029 | )     |  |   |        |   |  |   | 9,020    
|Total assets                                                  |  |                                   | 212,430 |                            |   | 289,651            |  |   | 98,306            |   |  |                  | 5,244  |   |                    |   | 10,836 |       |  |   | (12,640 | ) |  |   | 603,827  
|2005                                                          |  |                                   |         |                            |   |                    |  |   |                   |   |  |                  |        |   |                    |   |        |       |  |   |         |   |  |   |          
|Total revenues                                                |  | $                                 | 83,713  |                            | $ | 53,377             |  | $ | 1,240,547         |   |  | $                | 25,775 |   |                    | $ | 157    |       |  | $ | (1,722  | ) |  | $ | 1,401,847
|                                                              |  |                                   |         |                            |   |                    | 
|Interest revenues                                             |  |                                   | 3,131   |                            |   | 4,124              |  |   | 153               |   |  |                  | 1,128  |   |                    |   | 125    |       |  |   | (484    | ) |  |   | 8,177    
|Interest expense                                              |  |                                   | 73      |                            |   | 337                |  |   | 2,849             |   |  |                  | 937    |   |                    |   | 234    |       |  |   | (484    | ) |  |   | 3,946    
|Income (loss) before minority interest and income tax expense |  |                                   | 11,160  |                            |   | 5,152              |  |   | (2,037            | ) |  |                  | 556    |   |                    |   | (4,800 | )     |  |   |        |   |  |   | 10,031   
|Total assets                                                  |  |                                   | 356,341 |                            |   | 380,422            |  |   | 80,569            |   |  |                  | 28,554 |   |                    |   | 8,887  |       |  |   | (45,189 | ) |  |   | 809,584  
|2006                                                          |  |                                   |         |                            |   |                    |  |   |                   |   |  |                  |        |   |                    |   |        |       |  |   |         |   |  |   |          
|Total revenues                                                |  | $                                 | 91,970  |                            | $ | 79,948             |  | $ | 1,079,828         |   |  | $                | 45,905 |   |                    | $ | (300   | )     |  | $ | (2,546  | ) |  | $ | 1,294,805
|                                                              |  |                                   |         |                            |   |                    | 
|Interest revenues                                             |  |                                   | 9,610   |                            |   | 10,702             |  |   | 693               |   |  |                  | 3,320  |   |                    |   | 279    |       |  |   | (1,430  | ) |  |   | 23,174   
|Interest expense                                              |  |                                   | 155     |                            |   | 426                |  |   | 3,344             |   |  |                  | 2,716  |   |                    |   | 494    |       |  |   | (1,430  | ) |  |   | 5,705    
|Income (loss) before minority interest and income tax expense |  |                                   | 21,937  |                            |   | 10,981             |  |   | (430              | ) |  |                  | (19    | ) |                    |   | (7,938 | )     |  |   |        |   |  |   | 24,531   
|Total assets                                                  |  |                                   | 395,001 |                            |   | 581,709            |  |   | 87,461            |   |  |                  | 27,960 |   |                    |   | 16,140 |       |  |   | (51,064 | ) |  |   | 1,057,207

A summary of the Companys consolidated revenues by geographic area is presented below:



|                |  |                                  |           |      |   |           |  |   |          
|--------------- |  | -------------------------------- | --------- | ---- | - | --------- |  | - | ---------
|                |  | Consolidated Revenues (1)(000s)
|                |  | 2004                             |           | 2005 |   | 2006     
|United States   |  | $                                | 883,159   |      | $ | 692,556   |  | $ | 718,247  
|China           |  |                                  | 433,849   |      |   | 553,393   |  |   | 311,489  
|Japan (2)       |  |                                  | 90,009    |      |   |          |  |   | 35       
|Canada          |  |                                  | 79,874    |      |   | 59,868    |  |   | 74,419   
|Mexico          |  |                                  | 96,661    |      |   | 63,491    |  |   | 45,530   
|Other countries |  |                                  | 40,762    |      |   | 32,539    |  |   | 145,085  
|                |  |                                  |           |      |   |           |  |   |          
|Total           |  | $                                | 1,624,314 |      | $ | 1,401,847 |  | $ | 1,294,805
|                |  |                                  |           |      |   |           |  |   |          

---

|(1) | Revenues are attributed to countries based on location of customer.
|--- | -------------------------------------------------------------------

|(2) | In 2005 and 2006, no revenues from our grain merchandising segment were attributed to a customer located in Japan. As a result of a change in the location of the customers
headquarters, the 2005 and 2006 revenues were attributed to the customers U.S. based affiliated entity.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-29



---

Mitsubishi is a significant customer for grain sold by FGDI, accounting for 6%, 6%, and 8% of
consolidated total revenues for the years ended August 31, 2004, 2005, and 2006, respectively.

19. QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly data is set forth in the following table (in thousands):



|                                                              |  |         |         |        |   |         |  |        |         |       |   |         |  |   |          
|------------------------------------------------------------- |  | ------- | ------- | ------ | - | ------- |  | ------ | ------- | ----- | - | ------- |  | - | ---------
|                                                              |  | Quarter
|                                                              |  | First   |         | Second |   | Third   |  | Fourth |         | Total
|2005                                                          |  |         |         |        |   |         |  |        |         |       |   |         |  |   |          
|Total revenues                                                |  | $       | 445,489 |        | $ | 346,090 |  | $      | 315,370 |       | $ | 294,898 |  | $ | 1,401,847
|Income (loss) before minority interest and income tax expense |  |         | 1,572   |        |   | 3,222   |  |        | 3,552   |       |   | 1,685   |  |   | 10,031   
|Net income                                                    |  |         | 930     |        |   | 1,746   |  |        | 2,226   |       |   | 1,678   |  |   | 6,580    
|2006                                                          |  |         |         |        |   |         |  |        |         |       |   |         |  |   |          
|Total revenues                                                |  | $       | 350,009 |        | $ | 268,861 |  | $      | 358,798 |       | $ | 317,137 |  | $ | 1,294,805
|Income (loss) before minority interest and income tax expense |  |         | 5,371   |        |   | 6,556   |  |        | 6,023   |       |   | 6,581   |  |   | 24,531   
|Net income                                                    |  |         | 3,383   |        |   | 3,936   |  |        | 4,051   |       |   | 3,887   |  |   | 15,257   



As a result of the deterioration of the
financial statements of an unaffiliated equity investment, which included a going concern opinion, the Company recorded a loss of $0.6 million in the fourth quarter of fiscal 2006 related to this unaffiliated equity investment.

20. SUBSEQUENT EVENTS

On October 6, 2006, a
commodity pool limited partnership, which maintained its commodity account with the Company and for which a subsidiary of the Company acted as general partner and commodity pool operator, was unable to meet a margin call from assets of the pool. The
resulting liquidation of pool positions under continuing adverse market conditions resulted in a deficit account balance of approximately $1.5 million. The company is seeking recourse from the commodity trading advisor, which was a former
introducing broker of the Company, but the amount of possible recovery, if any, is unknown at this time. The Company expects to take a charge against income in the first quarter of the fiscal year ending August 31, 2007.

On November 2, 2006, the Company loaned an additional $600,000 to Green Diesel to finance the expanded facility.

On November 9, 2006, the Companys board of directors declared a dividend of $1.25 per share on the 4,845,736 shares outstanding. The stock
record date for such dividend payment was November 9, 2006, and the payment date is December 20, 2006.

On November 9, 2006,
the Company issued a notice of redemption of 27,463 shares of common stock held by Watseka Grain Cooperative Company pursuant to Article IV, Section 3 of the Amended and Restated Articles of Incorporation of the Company at a redemption price of
$13.35 per share. The Company claims a lien in the approximate amount of $254,000 against such proceeds relating to deficit amounts due to the Company.

On November 20, 2006, the Companys agreement with Deere Credit, related to the general corporate unsecured line of credit, was amended, increasing the available amount by $3,000,000 making a total loan
commitment of $13,250,000, with all other terms of the agreement remaining the same. Additionally, FCStones agreement with Deere Credit, related to the unsecured subordinated debt line of credit, was amended, increasing the available amount by
$5,000,000 making a total loan commitment of $12,000,000, with all other terms of the agreement remaining the same.



F-30



---

SCHEDULE I

FCSTONE GROUP, INC.

CONDENSED STATEMENT OF FINANCIAL CONDITION

Parent Company Only

August 31,
2005 and 2006

(in thousands)



|                                                              |  |      |        |   |      |   |        |  
|------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                                              |  | 2005 |        |   | 2006 |  
|ASSETS                                                        |  |      |        |   |      |   |        |  
|Cash and cash equivalents                                     |  | $    | 420    |   |      | $ | 669    |  
|Accounts receivable                                           |  |      | 38     |   |      |   | 219    |  
|Notes receivable                                              |  |      | 1,250  |   |      |   | 1,325  |  
|Notes receivablesubsidiaries                                 |  |      | 1,000  |   |      |   | 3,500  |  
|Deferred income taxes                                         |  |      | 4,013  |   |      |   | 4,697  |  
|Investments in affiliates and others                          |  |      | 54,865 |   |      |   | 69,332 |  
|                                                              |  |      |        |   |      |   |        |  
|                                                              |  | $    | 61,586 |   |      | $ | 79,742 |  
|                                                              |  |      |        |   |      |   |        |  
|LIABILITIES AND STOCKHOLDERS EQUITY                          |  |      |        |   |      |   |        |  
|Liabilities:                                                  |  |      |        |   |      |   |        |  
|Accounts payable                                              |  | $    | 25     |   |      | $ | 75     |  
|Accrued expenses:                                             |  |      |        |   |      |   |        |  
|Accrued pension liability                                     |  |      | 5,965  |   |      |   | 2,074  |  
|Income taxes payable                                          |  |      | 480    |   |      |   | 1,555  |  
|Other                                                         |  |      | 439    |   |      |   | 207    |  
|Notes payable                                                 |  |      | 4,250  |   |      |   | 10,250 |  
|                                                              |  |      |        |   |      |   |        |  
|Total liabilities                                             |  |      | 11,159 |   |      |   | 14,161 |  
|                                                              |  |      |        |   |      |   |        |  
|Minority interest                                             |  |      | 755    |   |      |   | 607    |  
|Redeemable common stock held by Employee Stock Ownership Plan |  |      | 4,487  |   |      |   | 6,079  |  
|                                                              |  |     
|Stockholders equity:                                         |  |      |        |   |      |   |        |  
|Common stock, no par value                                    |  |      | 21,524 |   |      |   | 21,747 |  
|Additional paid in capital                                    |  |      |       |   |      |   | 120    |  
|Accumulated other comprehensive loss                          |  |      | (4,555 | ) |      |   | (1,955 | )
|Retained earnings                                             |  |      | 32,703 |   |      |   | 45,062 |  
|                                                              |  |      |        |   |      |   |        |  
|                                                              |  |      | 49,672 |   |      |   | 64,974 |  
|Less maximum cash obligation related to ESOP shares           |  |      | (4,487 | ) |      |   | (6,079 | )
|                                                              |  |      |        |   |      |   |        |  
|Total stockholders equity                                    |  |      | 45,185 |   |      |   | 58,895 |  
|                                                              |  |      |        |   |      |   |        |  
|                                                              |  | $    | 61,586 |   |      | $ | 79,742 |  
|                                                              |  |      |        |   |      |   |        |  



S-1



---

SCHEDULE I



FCSTONE GROUP, INC.

CONDENSED STATEMENT OF OPERATIONS

Parent Company Only

Years Ended August 31, 2004, 2005 and 2006

(in thousands)



|                                                       |  |      |       |      |   |        |      |  |   |        |   |  | 
|------------------------------------------------------ |  | ---- | ----- | ---- | - | ------ | ---- |  | - | ------ | - |  | 
|                                                       |  | 2004 |       | 2005 |   |        | 2006 |  |   |       
|Revenues:                                              |  |      |       |      |   |        |      |  |   |        |   |  | 
|Interest                                               |  | $    | 10    |      | $ | 129    |      |  | $ | 283    |   |  | 
|Equity in earnings of affiliates                       |  |      | 9,063 |      |   | 10,142 |      |  |   | 24,839 |   |  | 
|                                                       |  |      |       |      |   |        |      |  |   |        |   |  | 
|Total revenues                                         |  |      | 9,073 |      |   | 10,271 |      |  |   | 25,122 |   |  | 
|                                                       |  |      |       |      |   |        |      |  |   |        |   |  | 
|Costs and expenses:                                    |  |      |       |      |   |        |      |  |   |        |   |  | 
|Interest                                               |  |      | 53    |      |   | 234    |      |  |   | 494    |   |  | 
|Bank charges and miscellaneous                         |  |      |      |      |   | 6      |      |  |   | 97     |   |  | 
|                                                       |  |      |       |      |   |        |      |  |   |        |   |  | 
|Total costs and expenses                               |  |      | 53    |      |   | 240    |      |  |   | 591    |   |  | 
|                                                       |  |      |       |      |   |        |      |  |   |        |   |  | 
|Income before minority interest and income tax expense |  |      | 9,020 |      |   | 10,031 |      |  |   | 24,531 |   |  | 
|Minority interest                                      |  |      | 576   |      |   | (499   | )    |  |   | (226   | ) |  | 
|                                                       |  |      |       |      |   |        |      |  |   |        |   |  | 
|Income before income tax expense                       |  |      | 8,444 |      |   | 10,530 |      |  |   | 24,757 |   |  | 
|Income tax expense                                     |  |      | 2,030 |      |   | 3,950  |      |  |   | 9,500  |   |  | 
|                                                       |  |      |       |      |   |        |      |  |   |        |   |  | 
|Net income                                             |  | $    | 6,414 |      | $ | 6,580  |      |  | $ | 15,257 |   |  | 
|                                                       |  |      |       |      |   |        |      |  |   |        |   |  | 



S-2



---

SCHEDULE I



FCSTONE GROUP, INC.

CONDENSED STATEMENTS OF CASH FLOWS

Parent Company Only

Years Ended August 31, 2004, 2005 and 2006

(in thousands)



|                                                                 |  |      |        |   |      |   |         |      |  |   |         |  
|---------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                 |  | 2004 |        |   | 2005 |   |         | 2006 | 
|Cash flows from operating activities:                            |  |      |        |   |      |   |         |      |  |   |         |  
|Net income                                                       |  | $    | 6,414  |   |      | $ | 6,580   |      |  | $ | 15,257  |  
|Equity in earnings of affiliates                                 |  |      | (9,108 | ) |      |   | (10,142 | )    |  |   | (24,839 | )
|Minority interest, net of distributions                          |  |      | 380    |   |      |   | (733    | )    |  |   | (226    | )
|Increase in deferred income taxes                                |  |      | (236   | ) |      |   | (450    | )    |  |   | (1,975  | )
|Increase in accounts receivable                                  |  |      | (17    | ) |      |   | (21     | )    |  |   | (181    | )
|Increase in accrued expenses                                     |  |      |       |   |      |   |        |      |  |   | 120     |  
|Increase in accounts payables                                    |  |      | 15     |   |      |   | 10      |      |  |   | 50      |  
|(Decrease) increase in income taxes payable                      |  |      | (27    | ) |      |   | 101     |      |  |   | 1,075   |  
|                                                                 |  |      |        |   |      |   |         |      |  |   |         |  
|Net cash used in operating activities                            |  |      | (2,579 | ) |      |   | (4,655  | )    |  |   | (10,719 | )
|                                                                 |  |      |        |   |      |   |         |      |  |   |         |  
|Cash flows from investing activities:                            |  |      |        |   |      |   |         |      |  |   |         |  
|Distributions from affiliates                                    |  |      | 5,373  |   |      |   | 2,514   |      |  |   | 17,395  |  
|Capital contribution in affiliate                                |  |      | (2,100 | ) |      |   | (225    | )    |  |   | (5,190  | )
|Purchase of exchange membership and stock                        |  |      |       |   |      |   |        |      |  |   | (2,600  | )
|Proceeds from sale of exchange membership                        |  |      |       |   |      |   |        |      |  |   | 613     |  
|                                                                 |  |      |        |   |      |   |         |      |  |   |         |  
|Net cash provided by investing activities                        |  |      | 3,273  |   |      |   | 2,289   |      |  |   | 10,218  |  
|                                                                 |  |      |        |   |      |   |         |      |  |   |         |  
|Cash flows from financing activities:                            |  |      |        |   |      |   |         |      |  |   |         |  
|Increase (reduction) in checks written in excess of bank balance |  |      | 124    |   |      |   | (124    | )    |  |   |        |  
|Proceeds from issuance of common stock                           |  |      | 1      |   |      |   | 1,744   |      |  |   |        |  
|Proceeds from issuance of redeemable common stock held by ESOP   |  |      |       |   |      |   | 4,487   |      |  |   | 223     |  
|Payment for redemption of stock                                  |  |      | (1,437 | ) |      |   | (613    | )    |  |   |        |  
|Payment of prior year patronage                                  |  |      | (1,429 | ) |      |   | (1,869  | )    |  |   |        |  
|Dividends paid                                                   |  |      |       |   |      |   |        |      |  |   | (2,898  | )
|(Issuance of) proceeds from repayment of notes receivable, net   |  |      | (6,250 | ) |      |   | 4,000   |      |  |   | (2,575  | )
|Proceeds from (issuance of) notes payable, net                   |  |      | 8,250  |   |      |   | (4,000  | )    |  |   | 6,000   |  
|Registration costs                                               |  |      |       |   |      |   | (839    | )    |  |   |        |  
|                                                                 |  |      |        |   |      |   |         |      |  |   |         |  
|Net cash (used in) provided by financing activities              |  |      | (741   | ) |      |   | 2,786   |      |  |   | 750     |  
|                                                                 |  |      |        |   |      |   |         |      |  |   |         |  
|Net (decrease) increase in cash and cash equivalents             |  |      | (47    | ) |      |   | 420     |      |  |   | 249     |  
|Cash and cash equivalents at beginning of year                   |  |      | 47     |   |      |   |        |      |  |   | 420     |  
|                                                                 |  |      |        |   |      |   |         |      |  |   |         |  
|Cash and cash equivalents at end of year                         |  | $    |       |   |      | $ | 420     |      |  | $ | 669     |  
|                                                                 |  |      |        |   |      |   |         |      |  |   |         |  
|Supplemental disclosures of cash flow information:               |  |      |        |   |      |   |         |      |  |   |         |  
|Cash paid during the year for:                                   |  |      |        |   |      |   |         |      |  |   |         |  
|Interest                                                         |  | $    | 53     |   |      | $ | 224     |      |  | $ | 443     |  
|Income taxes                                                     |  |      | 2,057  |   |      |   | 4,215   |      |  |   | 10,310  |  



S-3



---

SCHEDULE II

FCSTONE GROUP, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

(in thousands)



|                                                                                                         |  |                              |     |                             |   |                         |  |            |   |  |                         |        |   |  |   |      
|-------------------------------------------------------------------------------------------------------- |  | ---------------------------- | --- | --------------------------- | - | ----------------------- |  | ---------- | - |  | ----------------------- | ------ | - |  | - | -----
|                                                                                                         |  |                              |     | Additions                   |   |                         |  |            |  
|Those reserves which are deducted in the
Consolidated              Financial Statements from Receivables |  | Balance atBeginningof Period |     | Charged toCosts andExpenses |   | Charged toOtherAccounts |  | Deductions |   |  | Balance atEnd of Period
|Fiscal year ended August 31, 2004                                                                        |  |                              |     |                             |   |                         |  |            |   |  |                         |        |   |  |   |      
|Reserve for doubtful accounts                                                                            |  | $                            | 445 |                             | $ | 716                     |  | $          |  |  | $                       | (191   | ) |  | $ | 970  
|                                                                                                         |  |                              |     |                             |  
|Fiscal year ended August 31, 2005                                                                        |  |                              |     |                             |   |                         |  |            |   |  |                         |        |   |  |   |      
|Reserve for doubtful accounts                                                                            |  | $                            | 970 |                             | $ | 4,077                   |  | $          |  |  | $                       | (4,122 | ) |  | $ | 925  
|                                                                                                         |  |                              |     |                             |  
|Fiscal year ended August 31, 2006                                                                        |  |                              |     |                             |   |                         |  |            |   |  |                         |        |   |  |   |      
|Reserve for doubtful accounts                                                                            |  | $                            | 925 |                             | $ | 1,909                   |  | $          |  |  | $                       |       |   |  | $ | 2,834



S-4



---

EXHIBIT INDEX



|            |  |                                                                                                                                                     
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Document                                                                                                                             
|3.1         |  | Certificate of Incorporation of FCStone Group, Inc. (as currently in effect) (2)                                                                    
|            | 
|3.2         |  | Bylaws of FCStone Group, Inc. (as currently in effect) (2)                                                                                          
|            | 
|4.3         |  | FCStone Group, Inc. 2006 Equity Incentive Plan (3)                                                                                                  
|            | 
|10.1        |  | Employment Agreement, dated as of September 1, 2005, between FCStone, LLC, and Paul G. Anderson (4)                                                 
|            | 
|10.2        |  | Employment Agreement, dated as of January 5, 2004, between FCStone Group, Inc., and Jeff Soman (2)                                                  
|            | 
|10.3        |  | Employment Agreement, dated as of April 18, 1988, between Farmers Commodities Corporation and Robert V. Johnson (2)                                 
|            | 
|10.4        |  | Employment Agreement, dated as of May 9, 2003, between FCStone, LLC, and Steve Gutierrez (2)                                                        
|            | 
|10.5        |  | Employment Agreement, dated as of July 8, 1996, among Farmers Commodities Corporation, Farmers Grain Dealers, Incorporated, and Steve Speck (2)     
|            | 
|10.6        |  | CEO Deferred Compensation Plan for Paul G. Anderson dated February 22, 2002 (2)                                                                     
|            | 
|10.7        |  | Farmers Commodities Corporation Supplemental Nonqualified Pension Plan (5)                                                                          
|            | 
|10.8        |  | Short-term Incentive Plan (5)                                                                                                                       
|            | 
|10.9        |  | Long-term Incentive Plan (5)                                                                                                                        
|            | 
|10.10       |  | FGDI Incentive Plan (6)                                                                                                                             
|            | 
|10.11       |  | FCStone Group, Inc. Amended and Restated Mutual Commitment Compensation Plan (5)                                                                    
|            | 
|10.12       |  | Form of Director Indemnification Agreement (6)                                                                                                      
|            | 
|10.13       |  | Master Loan Agreement, dated November 3, 2003, between FCStone Group, Inc., and Deere Credit, Inc. (2)                                              
|            | 
|10.14       |  | Amended and Restated Unsecured Revolving Operating Note, dated May 19, 2006, between FCStone, LLC, and Deere Credit, Inc., due on March 1, 2007 (11)
|            | 
|10.15       |  | Master Loan Agreement, dated April 15, 2002, between FCStone Financial, Inc., and Deere Credit, Inc. (2)                                            
|            | 
|10.16       |  | Limited Corporate Guaranty, dated April 16, 2002, between FCStone Financial, Inc., and Deere Credit, Inc. (2)                                       
|            | 
|10.17       |  | Amended and Restated Revolving Statused Operating Note, dated February 23, 2006, between FCStone Financial, Inc., and Deere Credit, Inc. (7)        
|            | 
|10.18       |  | Revolving Subordinated Loan Agreement, dated November 21, 2002, between FCStone, LLC, and Deere Credit, Inc. (2)                                    
|            | 
|10.19       |  | First Amendment to the Revolving Subordinated Loan Agreement, dated November 3, 2003, between FCStone, LLC, and Deere Credit, Inc. (2)              
|            | 
|10.20       |  | Second Amendment to the Revolving Subordinated Loan Agreement, dated February 28, 2005, between FCStone, LLC, and Deere Credit, Inc. (11)           



---

|            |  |                                                                                                                                                            
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Document                                                                                                                                    
|10.21       |  | Unsecured Revolving Subordinated Note, dated November 21, 2002, between FCStone, LLC, and Deere Credit, Inc., due on December 1, 2005 (2)                  
|            | 
|10.22       |  | First Amendment to the Unsecured Revolving Subordinated Note, dated November 3, 2003, between FCStone, LLC, and Deere Credit, Inc. (2)                     
|            | 
|10.23       |  | Change in Terms Agreement, dated February 28, 2005, between FCStone, LLC, and Deere Credit, Inc. (8)                                                       
|            | 
|10.24       |  | Master Loan Agreement, dated February 15, 2001, between FCStone, LLC, and Deere Credit, Inc. (2)                                                           
|            | 
|10.25       |  | Unsecured Demand Note, dated September 15, 2000, between FCStone, LLC, and Harris Trust Savings Bank (2)                                                   
|            | 
|10.26       |  | Letter Agreement for $15 Million Credit Facility, dated March 5, 2003, between FCStone, LLC, and Harris Trust Savings Bank (2)                             
|            | 
|10.27       |  | Master Loan Agreement dated February 28, 2003 between FCStone Financial, Inc., and CoBank ACB (9)                                                          
|            | 
|10.28       |  | Guaranty of Payment, dated February 28, 2003, between FCStone Group, Inc., and CoBank ACB (9)                                                              
|            | 
|10.29       |  | Revolving Credit, Term Loan and Security Agreement, dated March 28, 2006, by and between FGDI, LLC, and CoBank ACB, as lender and agent (7)                
|            | 
|10.30       |  | First Amendment to Revolving Credit, Term Loan and Security Agreement, dated as of May 31, 2006 between FGDI, LLC, and CoBank ACB, as lender and agent (10)
|            | 
|10.31       |  | Cash Subordinated Loan Agreement, dated June 30, 2004, between FCStone, LLC, and Gerald Hirsch (5)                                                         
|            | 
|10.32       |  | Amendment to Cash Subordinated Loan Agreement and Promissory Note, dated June 30, 2006, between FCStone, LLC, and Gerald Hirsch (12)                       
|            | 
|10.33       |  | Cash Subordinated Loan Agreement, dated December 12, 2003 between FCStone, LLC, and William Shepard (5)                                                    
|            | 
|10.34       |  | Amendment to Cash Subordinated Loan Agreement and Promissory Note, dated December 14, 2005 between FCStone, LLC, and William Shepard (12)                  
|            | 
|10.35       |  | Trust Indenture for Industrial Revenue Bonds, dated December 1, 2003 (5)                                                                                   
|            | 
|10.36       |  | Lease Agreement, dated December 1, 2002, between the Industrial Development Board of the City of Mobile, Alabama and FGDI, LLC (5)                         
|            | 
|10.37       |  | Letter Agreement, dated March 31, 2004, between FCStone Merchant Services, LLC, and Fortis Capital Corp. for $20,000,000 credit facility (6)               
|            | 
|10.38       |  | Promissory Note ($20,000,000), dated May 10, 2004, between FCStone Merchant Services, LLC, and Fortis Capital Corp. (6)                                    
|            | 
|10.39       |  | Continuing Security Agreement between FCStone Merchant Services, LLC, and Fortis Capital Corp. (6)                                                         
|            | 
|10.40       |  | Letter Agreement, dated February 17, 2004, between FCStone Merchant Services, LLC, and RZB Finance, LLC, for $5,000,000 credit facility (6)                
|            | 
|10.41       |  | General Security Agreement and Supplement, dated February 17, 2004, between FCStone Merchant Services, LLC, and RZB Finance, LLC (6)                       
|            | 
|10.42       |  | Amended and Restated Promissory Note ($8,000,000), dated January 30, 2006, between FCStone Merchant Services, LLC, and RZB Finance, LLC (11)               



---

|            |  |                                                                                                                                                                           
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Document                                                                                                                                                   
|            | 
|10.43       |  | Demand Note, dated November 23, 2004, between FCStone Merchant Services, LLC, and UFJ Bank, Limited (12)                                                                  
|            | 
|10.44       |  | Letter Agreement, dated December 1, 2004, between FCStone Merchant Services, LLC, and Standard Chartered Bank (12)                                                        
|            | 
|10.45       |  | Promissory Note, dated December 1, 2004, between FCStone Merchant Services, LLC, and Standard Chartered Bank (12)                                                         
|            | 
|21.1        |  | Subsidiaries of the Registrant (2)                                                                                                                                        
|            | 
|23.1        |  | Consent of KPMG LLP (1)                                                                                                                                                   
|            | 
|31.1        |  | Certification of Paul G. Anderson, Chief Executive Officer, pursuant to Rule 13a-15(e) /15d-15(e). (1)                                                                    
|            | 
|31.2        |  | Certification of Robert V. Johnson, Chief Financial Officer, pursuant to Rule 13a-15(e) /15d-15(e). (1)                                                                   
|            | 
|32.1        |  | Certification of Paul G. Anderson, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1) 
|            | 
|32.2        |  | Certification of Robert V. Johnson, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)

---

|(1) | Filed herewith.
|--- | ---------------

|(2) | Previously filed as an exhibit to the Registration Statement on Form S-4 filed by FCStone Group, Inc., on August 18, 2004.
|--- | --------------------------------------------------------------------------------------------------------------------------

|(3) | Previously filed as an exhibit to the Registration Statement on Form S-8, filed by FCStone Group, Inc., on June 12, 2006.
|--- | -------------------------------------------------------------------------------------------------------------------------

|(4) | Previously filed as an exhibit to the Current Report on Form 8-K filed by FCStone Group, Inc., on December 14, 2005.
|--- | --------------------------------------------------------------------------------------------------------------------

|(5) | Previously filed as an exhibit to Amendment No. 2 to the Registration Statement on Form S-4 filed by FCStone Group, Inc., on December 9, 2004.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------



---

|(6) | Previously filed as an exhibit to Amendment No. 3 to the Registration Statement on Form S-4 filed by FCStone Group, Inc., on December 30, 2004.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Previously filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended February 28, 2006, filed by FCStone Group, Inc., on April 19, 2006.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Previously filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended February 28, 2005 filed by FCStone Group, Inc., on April 14, 2005.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Previously filed as an exhibit to Amendment No. 1 to the Registration Statement on Form S-4 filed by FCStone Group, Inc., on October 6, 2004.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Previously filed as an exhibit to the Quarterly Report on Form 10-Q for the quarter ended May 31, 2006, filed by FCStone Group, Inc., on July 17, 2006.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | Previously filed as an exhibit to the Registration Statement on Form S-1, filed by FCStone Group, Inc., on October 12, 2006.
|---- | ----------------------------------------------------------------------------------------------------------------------------

|(12) | Previously filed as an exhibit to the Annual Report on 10-K, filed by FCStone Group, Inc., on November 29, 2006.
|---- | ----------------------------------------------------------------------------------------------------------------