OPEN JOINT-STOCK COMPANY
RUSSIAN TRADING SYSTEM STOCK EXCHANGE
Summary consolidated financial statements
derived from the audited consolidated financial
statements for the year ended 31 December 2010
OJSCRTSSTOCKEXCHANGE
Summary Consolidated Statement of Financial Position as at 31 December 2010
(expressed in thousands of Russian Roubles)
The summary consolidated financial statements on pages 1 - 6 should be read in conjunction with the consolidated financial statements from which they were derived. 2
31 December 2010 31 December 2009
ASSETS
Cash and cash equivalents 15 616 143 27 254 134 Financial instruments held for trading 16 248 328 8 008 Central counterparty financial assets 1 324 964 -
Investments 5 369 926 1 061 384
Amounts receivable under reverse repurchase agreements 331 746 289 966 Accounts receivable 147 772 77 061
Prepaid expenses 62 892 76 477
Current tax prepayments 49 081 80 277 Deferred tax asset 23 987 21 492
Other assets 22 713 26 526
Fixed and intangible assets 593 553 294 717
Goodwill 9 912 9 912
Total assets 39 801 017 29 199 954
LIABILITIES
Guarantee fund liabilities 24 438 713 19 294 375 Settlement accounts of trading participants 6 929 424 3 690 832 Central counterparty financial liabilities 1 324 964 - Insurance fund liabilities 1 259 884 986 100 Dividends and coupons payable to clients 181 363 106 409 Payables and advances received 166 600 145 771 Current tax payables 90 862 2 257
Accrued expenses 49 162 47 630
Deferred tax liability 10 266 11 966
Other liabilities 15 350 26 959
Total liabilities 34 466 588 24 312 299
EQUITY
Share capital 163 606 163 606
Share premium 1 137 608 1 137 608 Retained earnings 3 879 654 2 983 725 Cumulative translation reserve 3 335 -
Total equity attributable to shareholders of the Group 5 184 203 4 284 939
Non-controlling interest 150 226 602 716
Total equity 5 334 429 4 887 655
OJSCRTSSTOCKEXCHANGE
Summary Consolidated Statement of Cash Flows for the Year Ended 31 December 2010
(expressed in thousands of Russian Roubles)
The summary consolidated financial statements on pages 1 - 6 should be read in conjunction with the consolidated financial statements from which they were derived. 3
2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Fee income received 1 562 919 1 151 078 Interest income received 888 635 1 318 818 Other income received 38 930 14 231 Personnel and other operating expenses paid (1 930 314) (1 348 677)
Income tax paid (159 960) (394 192)
Cash flows from operating activities before changes in operating assets
and liabilities 400 210 741 258
Changes in operating assets and liabilities
Net (increase) decrease in financial instruments held for trading (16 039 197) 62 133 Net increase in accounts receivable (68 265) (3 986) Net increase in accounts receivable under
reverse repurchase agreements (45 856) (134 643) Net decrease (increase) in prepaid expenses 13 585 (46 752) Net increase (decrease) in settlement accounts of trading participants 3 231 287 (523 670) Net increase in guarantee and insurance fund liabilities 5 418 122 8 590 722 Net increase (decrease) in dividends and coupons payable to clients 74 954 (68 796) Net increase (decrease) in payables and advances received 20 829 (14 387) Net change in other assets and other liabilities (3 126) (1 697)
Net cash (used in) from operating activities (6 997 457) 8 600 182
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash paid for investments (4 187 811) (868 260) Purchase of fixed and intangible assets (365 749) (191 560) Proceeds from disposal of fixed and intangible assets 124 379 827 Proceeds from sale of subsidiaries and associates 332 285 -
Net cash used in investing activities (4 096 896) (1 058 993)
CASH FLOWS FROM FINANCING ACTIVITIES
Share capital issued by subsidiary - 133 787 Acquisition of non-controlling interest (449 051) -
Dividends paid (114 591) (64 091)
Treasure shares purchased -
(91 265)
Net cash used in financing activities (563 642) (21 569)
Net (decrease) increase in cash and cash equivalents before foreign currency
effect (11 657 995) 7 519 620
Foreign currency effect 20 004 322 198
Net (decrease) increase in cash and cash equivalents (11 637 991) 7 841 818
Cash and cash equivalents at the beginning of the year 27 254 134 19 412 316
OJSCRTSSTOCKEXCHANGE
Summary Consolidated Statement of Changes in Equity for the Year Ended 31 December 2010
(expressed in thousands of Russian Roubles)
The summary consolidated financial statements on pages 1 - 6 should be read in conjunction with the consolidated financial statements from which they were derived. 4
Attributable to equity holders of the Group Non-controlling
interest
Total equity Share
capital
Share premium
Retained earnings
Cumulative translation reserve
Total
Balance as at 1 January 2009 165 456 1 227 023 1 915 927 - 3 308 406 456 813 3 765 219
Profit and total comprehensive
income for the year - - 1 131 889 - 1 131 889 12 116 1 144 005 Dividends paid to shareholders - - (64 091) - (64 091) - (64 091) Treasury shares (1 850) (89 415) - - (91 265) - (91 265) Share capital issued by a
subsidiary - - - - - 133 787 133 787
Balance as at 31 December 2009 163 606 1 137 608 2 983 725 - 4 284 939 602 716 4 887 655
Balance as at 1 January 2010 163 606 1 137 608 2 983 725 - 4 284 939 602 716 4 887 655 Total comprehensive income
Profit for the year - - 1 002 332 - 1 002 332 2 690 1 005 022
Other comprehensive income
Foreign currency translation
differences for foreign operations - - - 3 335 3 335 2 059 5 394
Total comprehensive income for
the year - - 1 002 332 3 335 1 005 667 4 749 1 010 416
Transactions with owners recorded directly in equity
Purchase of non-controlling
interest - - 8 188 - 8 188 (457 239) (449 051) Dividends paid to shareholders - - (114 591) - (114 591) - (114 591)
Total transactions with owners - - (106 403) - (106 403) (457 239) (563 642)
OJSCRTSSTOCKEXCHANGE
Notes to the Summary Consolidated Financial Statements - 31 December 2010
(expressed in thousands of Russian Roubles)
The summary consolidated financial statements on pages 1 - 6 should be read in conjunction with the consolidated financial statements from which they were derived. 5
1 General Information
These summary consolidated financial statements, which comprise the summary consolidated statement of financial position as at 31 December 2010, the summary consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and related notes are derived from the audited consolidated financial statements of Open Joint-Stock Company Russian Trading System Stock Exchange (the Company or RTS Stock Exchange) and its subsidiaries (together referred to as the “Group”).
RTS Stock Exchange is a stock exchange based in Moscow, Russian Federation.
The Group provides stock exchange services, including trading, settlement and clearing, and depository services. The Group was formed during the year ended 31 December 2007 as a result of an acquisition by the Group of the subsidiaries from the Non-commercial Partnership “Russian Trading System” Stock Exchange (NP RTS). Principal subsidiaries and associates of the Group as at 31 December 2010 and 31 December 2009 comprise:
Name Principal activities 31 December 2010
Voting rights, %
31 December 2009 Voting rights, %
CJSC Clearing Center RTS (CC RTS) Clearing services 100.00% 100.00% Non-banking Credit Organisation Settlement Chamber
RTS СJSC (SC RTS) Settlement services 100.00% 100.00% CJSC Depository Clearing Company (DCC) Depository services 97.76% 60.46% Open Joint-Stock Company “Evraziyskaia Trading
System” Commodity Exchange (ETS) Stock Exchange 61.82% 59.41% Private Joint-Stock Company “Ukrainian Stock Exchange
Holding” (USEH) Holding company 100.00% -Open Joint-Stock Company “Ukrainian Exchange” (UEX) Stock Exchange 43.00% 49.00% LLC CPM (CPM) IT and telecommunications 35.00% 35.00% JSC Moscow Energy Exchange (Mosenex) (former OJSC
“Commodity Exchange Arena”) Stock Exchange 15.00% 20.00%
The Company was established in 2004. The Company has a stock exchange license issued by the Federal Service for Financial Markets (the FSFM). The Company also has a license for organisation of derivatives exchange trading issued by the Commodity Exchanges Commission of the FSFM.
CC RTS provides clearing services for the Derivative Market Section (FORTS) and the Stock Market Section of the Company. CC RTS has a license to perform clearing activities issued by the FSFM.
SC RTS provides settlement services to trading participants involved in trading on RTS Stock Exchange. SC RTS is a non-banking credit institution. SC RTS has a licence to perform settlement services issued by the Central Bank of the Russian Federation (the CBR).
DCC provides depository, clearing and settlement services. DCC has a license to perform depository activities, and a license to perform clearing activities issued by the FSFM. In June 2010, the Group purchased 37.3% shares of DCC from a non-controlling shareholder for 438 210 070 RUB.
CPM provides IT services and sells IT equipment in Russia. The Group has a significant influence over CPM since 1996.
The Company, CC RTS, SC RTS, DCC and CPM are located in Russia.
ETS is a commodity exchange in Kazakhstan, which has a license for organisation of trading in commodities. In April 2010 the Group purchased 2.41% shares of ETS from a non-controlling shareholder.
UEX is a stock exchange in Ukraine, which has a stock exchange license and facilitates spot and derivatives trading. In January 2010 the Group sold 6.00% of its stake in UEX.
In September 2010 the Group established USEH, which holds shares of UEX. In December 2010 the Group sold 5% of investments in JSC Moscow Energy Exchange (former OJSC “Commodity Exchange Arena”) and lost significant influence over this company.
The Group has 470 employees as at 31 December 2010 (2009: 432 employees).
The Company’s legal address is Vozdvizhenka Street 4/7, bld.1, Moscow, 125009, Russian Federation.
The Group in the course of its activities as a stock exchange uses services of NP RTS, which provides technical support to the Group and to trading participants of all the RTS Stock Exchange markets.
OJSCRTSSTOCKEXCHANGE
Notes to the Summary Consolidated Financial Statements - 31 December 2010
(expressed in thousands of Russian Roubles)
The summary consolidated financial statements on pages 1 - 6 should be read in conjunction with the consolidated financial statements from which they were derived. 6
2 Operating Environment of the Group
The Russian Federation is experiencing political and economic change that has affected, and may continue to affect, the activities of enterprises operating in this environment. Consequently, operations in the Russian Federation involve risks that typically do not exist in other markets. In addition, the contraction in the capital and credit markets and its impact on the Russian economy have further increased the level of economic uncertainty in the environment. The consolidated financial statements reflect management’s assessment of the impact of the Russian business environment on the operations and the financial position of the Group. The future business environment may differ from management’s assessment.
3 Basis of preparation
Management makes a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare the consolidated financial statements in conformity with IFRS. Actual results could differ from those estimates.
Any significant estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Significant areas of critical judgments and estimates in applying accounting policies are as follows:
The Group does not consolidate in these financial statements NP RTS due to the fact that the Group does not control NP RTS as it does not have the legal power to govern the financial and operating policies of NP RTS. At the same time Management has the ability to participate in financial and operating decisions of NP RTS.
The Group recognised a loss of significant influence in Mosenex in 2010 after disposal of 5% of Mosenex shares to NP RTS in December 2010, as a result of which the Group’s share in Mosenex decreased from 20% to 15%. Previously recognised equity accounted investment in the associate was derecognised, and the retained stake in Mosenex was designated as at fair value through profit or loss and measured at fair value.
Estimation of impairment allowances in relation to financial assets measured at amortised cost involves the exercise of judgment. These include mainly cash and cash equivalents, investments carried at amortised costs, amounts receivable under reverse repurchase agreements and other receivables.
The complete consolidated financial statements of the Group as at and for the year ended 31 December 2010 are prepared in accordance with International Financial Reporting Standards. These summary consolidated financial statements are derived from the complete consolidated financial statements, except that substantially all note disclosures are omitted.