General meeting of NDC members held 23 December 2008 approved the following approaches to the reorganization of NDC into a joint stock company:
– Type of a joint stock company in which NDC is to be reorganized: closed joint stock company (CJSC);
– Share distribution among NDC members: in proportion to the number of votes at an NDC general meeting as of the date of the decision on NDC’s reorganization into a joint stock company;
– The charter capital is to be established in accordance with the clause “Capital and Reserves” of NDC’s financial statement as of the last reporting date before the decision on NDC’s reorganization into a joint stock company. The charter capital will amount to RUR 1,505,920,000 and will be divided to 150,592 common inscribed shares with RUR10,000 nominal value each. Thirteen shares will represent one vote.
The transfer protocol will be prepared by 31 March 2009 in accordance with the results of the inventory.
NDC’s director has been authorized to take all measures included in the plan. The meeting participants nominated Nikolay Egorov, Director, NDC, and Eddie Astanin, Deputy Director, NDC, as the candidates to the Board of Directors of Settlement Depository Company CJSC.
Also were approved NDC’s income and expense budget and NDC’s capital investment budget for 2009. The participants in the meeting reviewed corrected budgets of NDC Technological Platform Modernization Program.
Among significant initiatives of 2008 is also the expansion of the service and enhancement of the quality. This year company presented new comprehensive settlement technology. NDC, MICEX and MICEX Settlement House successfully launched a technology supporting the Bank of Russia’s direct REPO settlements on corporate Eurobonds on DVP terms on the OTC market. For 2008 NDC serviced 26 issues of corporate bonds by 16 major foreign issuers. Currently, NDC services 93 issues of Eurobonds by 43 foreign issuers which are held on deposit on NDC’s account with Clearstream Banking including 52 issues which are included in the Bank of Russia’s Lombard List.
NDC is working on improvement of interdepository interaction with DCC (NDC-DCC “Bridge”) extending the list of securities admitted to the NDC-DCC “Bridge”. The number of securities admitted to the “Bridge” has expanded five-fold within the year. Currently 133 issues of securities can be processed through the “Bridge”.
Total market value of securities transferred by means of SSS (Speedy Settlement Scheme) for the period from 6 November 2007 to 1 November 2008 amounted to RUR73.28 billion. In 2008 NDC expanded electronic documents interchange (EDI) having achieved agreements with 10 registrars to join EDI system. EDI operations with joint stock company registers for 11 months of 2008 amounted to 82.5% of all operations.
In December 2008 NDC presented eClearSettle, a new functional technological platform which has been evaluated positively by its customers. The company plans to provide its clients with trial access to the full range of inventory operations through eClearSettle system.
NDC succeeded also in risk management. Thomas Murray affirmed NDC’s rating at AA-, which means very low risk. Despite the current turmoil company achieved positive financial results.
In 2008 NDC’s total equity according to Russian Accounting Standards exceeded its target sum of RUR1.5 billion. For the first nine months of 2008 it rose 27% to RUR1.722 billion (compared with RUR1.355 billion as of 1 January 2008). Thus NDC’s target capitalization in the amount of RUR1.5 billion, approved by a decision of the company’s general meeting held 22 December 2005 has been achieved ahead of schedule (according to the decision the target capitalization was to have been reached by 1 January 2010).
NDC revenues for January-September 2008 reached RUR924.2 million. This is 11% more than for the first nine months of 2007 (RUR834.4 million). The company’s net profit reached RUR370.2 million or 18.4% more than for the comparable period of 2007 (RUR312.8 million).
Securities turnover (the market value of securities transferred in inventory operations) rose 13.6% for the first nine months of 2008, against the comparable period of 2007, to reach RUR45.8 trillion (RUR40.265 trillion in January-September 2007). Shares constituted 38.4% of securities involved in inventory operations, which is a significant part of NDC’s securities turnover.
The number of inventory operations conducted by NDC for January-September 2008 amounted to almost 2 million. This was 8.6% more than for the first nine months of 2007 (1,515,648 operations with shares or 78% of all inventory operations).
“Today’s decision on the basic terms of reorganization is not a decision on reorganization; that will be made in spring,” says Nikolay Egorov, director, NDC. “The main result for 2008 is the fact that NDC confirmed its position as the largest depository, also holding a position of the leading settlement depository in Russia’s financial market.
“NDC’s share in aggregate volume of assets on deposit in all Russian settlement depositories for 1H 2008 amounted to 62% [i]. We expect that despite the complicated conditions of the current year, NDC will hit its target with regard to its net profit.”
L.D.