STATEMENT FROM THE CHAIRMAN OF THE SUPERVISORY BOARD
I am pleased to present you with the 2021 report of the Supervisory Board of Moscow Exchange.
The past year 2021 was a year of strong global and Russian economic recovery and high capital market activity, which had a positive impact on Moscow Exchange’s business. However, the risks of an ongoing pandemic remained high, and we had to continue operating under administrative restrictions on public events and transport logistics. For these reasons, the activities of the Supervisory Board and the Board committees took place predominantly remotely. This did not prevent the Supervisory Board from holding in-depth discussions and adopting a number of crucial decisions aimed at supporting the company’s business development and expansion, improving the quality of risk control and information security, ensuring the transformation of corporate culture to increase employee initiative and responsibility, and developing sourcing in the IT field. Particular attention was paid to implementing the transformation plan for the National Clearing Centre and establishing competence centres across the Group, supporting management initiatives in the area of innovation and transition to a flexible office, adopting a clearing strategy and considering strengthening the Group’s risk management, internal audit and compliance controls. Much attention was given to succession planning for the senior management team as well as the Supervisory Board itself.
The Annual General Meeting 2020, which elected the current Supervisory Board, took place at a time of acute pandemic development in the country and the world. For this reason, it was held in absentia. At the same time, shareholders were given the opportunity to read the speeches of the company’s management online and to ask questions as part of the traditional Shareholders’ Day, which took place in the form of a video conference. On the recommendation of the Supervisory Board, 85% of the consolidated net profit under IFRS for 2020 was allocated for dividends. The Annual General Meeting for 2021 will also be held in absentia. Individual shareholders of the Exchange, whose number exceeds 370,000, will be able to use the E-voting service developed by National Settlement Depository, part of the Moscow Exchange Group, to vote at the meeting.
Moscow Exchange achieved record operating and financial results for 2021. The continued inflow of private investors, intensification of the IPO market, expansion of trading hours, and launch of new products and services all resulted in record trading volumes and fee income.
The Supervisory Board recommended that shareholders abstain from approving an annual dividend distribution for the year 2021. This decision rests on the current dividend policy, which stipulates the primacy of compliance of Moscow Exchange companies with regulatory requirements for capital allocation over dividend distribution. We consider the current high burden on capital of the Group’s subsidiaries as temporary. Moscow Exchange’s dividend policy remains unchanged. The Supervisory Board continues to assess the situation and intends to resume discussions around dividend payments later in 2022.
The composition of the Supervisory Board of the Moscow Exchange to be elected at the 2022 Annual General Meeting of Shareholders is planned to be substantially renewed. This will concentrate expertise in financial infrastructure, as well as retail and digital products. Moscow Exchange continues to follow best practices in corporate governance. Under the proposed composition, independent directors should comprise more than a third of the Supervisory Board. In order to improve the efficiency of the Supervisory Board, the Annual General Meeting will be asked to reduce the number of members to nine.
In conclusion, I would like to thank all of the members of the Supervisory Board who were on the previous Supervisory Board for their great contribution to the development of the company and for their active involvement in the work of the Supervisory Board.
I would like to acknowledge the friendly and highly professional work of all employees and especially the contribution of the Group’s management, which made it possible to achieve outstanding results and create a good foundation for the future.
In conclusion, I would like to thank Moscow Exchange’s clients and shareholders for their trust, support and effective cooperation in developing the Russian financial market.