2013 Annual Report And Consolidated Financial Statements

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New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statements2013 Annual Report andConsolidated Financial StatementsNEW ZEALAND CLEARING ANDDEPOSITORY CORPORATION LIMITED1

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statements1 Chair CommentaryI am pleased to present the NZCDC annual reportfor the 2013 year. 2013 saw significant growth inthe value of cash market (up from 9b in 2012 to 14.6b in 2013) and derivatives (up from 38.8bin 2012 to 70.1b in 2013) obligations cleared andsettled through NZCDC. Preparation for the launch ofEquity Derivatives, and further investment in systemfunctionality and stability were key focus points in2013. System reliability for 2013 was 99.81%. Thisplaces the business in a strong position for newventures over the coming year.2013 Year in ReviewNZCDC’s net profit after tax for the year ended 31December 2013 was 2.6m. Profitability was up 38%on last year, with increased trading driving higherclearing fees. NZCDC remains in a strong overallposition with 11.3m of equity, and high cash holdingsheld on call or in short term deposits. Dividendsof 2.5m have been distributed to NZX Limited.Dividends are set at a level which ensure the riskcapital reserves of NZCDC remain at appropriatelevels, and that the group has sufficient workingcapital for day to day operations with any surpluscash being returned to NZX Limited. We again wouldlike to acknowledge the support of NZX Limitedin respect of the provision of technology services,infrastructure, and support services.From an operational perspective 2013 marked thelaunch of the Government’s share offer programmewith Mighty River Power and Meridian Energy beingthe first of the SOEs to list on NZX. Trades in theselisted companies are now successfully being clearedand settled through the NZCDC infrastructure.Steady growth in quantity and value of stock lendingcontinued over 2013 with loan values in 2013increasing by 27% on the previous year to 2.8 billionof loans (in aggregate), and the total quantity of loans2up by 24%. Stock lending continues to be a valuablecomponent of the NZCDC depository offering and welook forward to seeing ongoing growth in activity andadditional depth in the lending pool in 2014 to supportthe growth of the exchange traded equity optionsmarket.As well as being utilized for strategic purposes, stocklending assists participants in avoiding settlementtransaction failure. This is evidenced by a pleasinglylow number of fails in 2013; just 287 fails for theyear, a 17% drop in the number of settlement failscompared to the previous year, despite a 62%increase in the value of transactions settled duringthe 2013 period.A key purpose of the clearing house operatedby NZCDC is to manage the risks that may arisethrough one or more participants defaulting on theirsettlement transactions. This is achieved by havinga Risk Management Framework that includes themargining of participants’ outstanding positions andmaintaining risk capital sufficient to cover worstcase scenarios. NZCDC conducts back testing andstress testing at regular intervals to ensure levelsare sufficient. Sufficiency of stress testing is alsoreviewed on a regular basis, and in 2013 additionalstress case scenarios were introduced to furtherincrease the range of scenarios being tested.Changes were also made that allow NZCDC to call onan additional 5m of risk capital from NZX Limited,increasing the total available capital under the Deedof Commitment between NZCDC and NZX to 10m.The NZCDC Business Continuity Plan was activatedwhen Wellington experienced a sizeable earthquakein August 2013 which caused the NZX building to beevacuated. Settlement was able to continue as normaland there was no adverse impact from the event.Substantial work was performed over the year in

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statementspreparation for the introduction of Equity Derivativeson the NZX market. These new products will becleared and settled on the NZCDC infrastructure.Work included changes to the system and the onboarding of a participant that has been accreditedto clear and settle these new products. In additionNZCDC has applied to the European Security MarketsAuthority (ESMA) to become a recognised CentralCounterparty under European legislation followingmoves in Europe and the US towards mandatoryclearing of certain over-the-counter derivatives.Obtaining this recognition will further strengthen theNZCDC derivatives clearing and settlement offering.We look forward to the trading and settlement ofthese new products getting underway in early 2014.From a systems perspective, multiple changeswere made in relation to the settlement of equityderivatives in 2013. In addition upgrades were madeto the infrastructure that the NZCDC system, BaNCS,operates on. Among other things, the upgradeshave greatly improved the processing time of tradesflowing from the trading system into BaNCS, and willensure that system security and stability is enhanced.In anticipation of the SOE listings, NZCDC inconjunction with the share registries made changesto BaNCS and to business processes to automate thecreation of large volumes of new shareholders in asmooth and timely manner.There were no material BaNCS outages in 2013, withsystem availability at 99.81% for the year.OutlookThe planned launch of a number of equity derivativecontracts will go ahead in 2014. New products includean index future based on the NZX20 and three equityoption contracts which will all be cleared through theNZCDC infrastructure.Participant growth will also be a focus for the2014 year. Increasing depository participation is ofparticular importance and changes to the NZCDC feestructure in 2013 were tailored to make our offeringmore attractive to those potential new customers.Further enhancements to system security andreliability are planned for 2014. Other systemdevelopments planned for 2014 will be driven bychanges to NZX markets and new products or otherbusiness development initiatives.Regulatory OversightQuarterly meetings were held between NZCDCand the joint regulators, the Reserve Bank of NewZealand and the Financial Markets Authority, toensure that conditions of designation of NZCDC as asettlement system were being complied with. Itemssubject to review by the joint regulators in accordancewith designation conditions included changes to theBoard, the introduction of Equity Derivatives and theapplication to ESMA to become a recognised CentralCounterparty under European legislation. NZCDClooks forward to furthering our relationship with thejoint regulators in 2014.During the year we published: the third NZCDC annual report an audit report on balances held in the Depositoryand an operational audit reportAcknowledgementsThere were no changes to the NZCDC Board during2013. I would like to thank my fellow Directors fortheir support in the governance of the NZCDC Groupand for their commitment to its ongoing development.A final dividend amount of 3,200 per share wasagreed on, post year end. This equates to a totaldividend payment of 768,000.Pip Dunphy Chair3

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statements2 Company OverviewBusiness OverviewNZCDC through its subsidiaries operates aclearing and settlement system that has beendesignated under part 5C of the Reserve Bank ofNew Zealand Act 1989. The system consists of acentral counterparty clearing house, operated byNew Zealand Clearing Limited, and a linked centralsecurities depository, operated by New ZealandDepository Limited. NZCDC is a wholly ownedsubsidiary of NZX Limited.between the NZCDC Depository and the NZClearsystem operated by RBNZ.2013 Highlights Services that the NZCDC Group provides include: Clearing and settlement of trades conductedon NZX Markets, including the NZX Main Board,Alternative Market, Debt Market, NZX DerivativesMarket and Fonterra Shareholders’ MarketSecurities safe custodyCorporate action notification and processingStock lending and borrowing andSettlement of transactions in products admittedto the Depository (also known as OTC Trades)The system operated by NZCDC also enablesparticipants to effect electronic transfer of legal titleof securities on register. It also enables participantsto effect electronic transfer of legal title of securitieson register.The system software is provided by Tata ConsultancyServices Limited (TCS), one of India’s largestcompanies with a market capitalisation of aroundUS 50b. Their industry-leading market infrastructureproduct, BaNCS, has been implemented across allNZCDC business areas. Connectivity for participantsis available through SWIFT ISO15022 messaging orthrough a web-based user interface.NZCDC’s system utilises the SWIFT network toenable participants to seamlessly transfer securities4Launch of Government’s share offer programmeSystem infrastructure upgrades, includingWeblogic and JavaSystem changes to enable the successfulintroduction of Equity DerivativesSystem availability at 99.81%62% increase in value of cash markettransactions settled81% increase in value of derivatives markettransactions settled.Focus for 2014The two main focus points for 2014 will be theintroduction of Equity Derivatives and the increasein participation, specifically in the Depository. Theintroduction of Equity Derivatives is likely to drive anincrease in the demand for securities in the lendingpool.Upgrading to the current version of the SWIFTmessaging protocol enhances the ability forparticipants to perform seamless straight-throughprocessing via the SWIFT network. In relation tothe system, further enhancements will be made toreliability, with a second instance of weblogic beingintroduced, ensuring seamless continuity in theunlikely event of an outage. System enhancementswill also focus on security and increased auditability.During 2014 NZCDC will complete a self assessmentagainst the CPSS-IOSCO Principles for MarketInfrastructure.

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statements3 Operating and Financial ReviewOperating ReviewThe core operating statistics of NZCDC for the 2013 financial year ending 31 December 2013 are shown below.Comparative figures are provided for the 2012 year.Core Operating StatisticsSettlement of Cleared 8.814,38812,04720132012213179--20132012Value ( m)1,262.7856.5Number23,91419,809Average Transaction Value ( )52,80443,238Number of Settlement DaysSecuritiesValue ( m)Number of Settlement LinesDerivatives*Notional Value ( USm)Number of lots* This represents derivatives contracts that transitioned to final settlement.Assets Under Custody (as at year end)Depository Equity ( m)Debt ( m)Depository Transactions5

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statements3 Operating and Financial Review (CONT.)Securities Lending20132012Number of Loans4,6813,782Total Loan Value ( ,5002403099.8199.98Average Loan Value ( )Average Duration (Days)System AvailabilityTotal System Operation (Minutes)Outages (Minutes)Availability (%)System availability is based on the time the core clearing and settlement system is available for service.Availability is calculated in respect of each settlement (business) day from 7.30am to 6.00pmRisk Management StatisticsOpen/Unsettled Contracts20132012172.95107.99Derivatives —Open Interest —Daily Average ( USm)35.016.6Collateral Held (Daily ,000Securities—Daily Average ( m)Cash ( )Bank Guarantee ( )Cash collateral is held on call and in short term bank investments in line with the NZCDC Investment Policy.Risk Management InspectionsClearing participants inspected during the year62013201299

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial StatementsFinancial PerformanceThe following summary income statement reflects the combined operation of the NZCDC Group for the yearended 31 December 2013.2013 ( 000’s)2012 ( 000’s)4,0443,199Participant Fees and 2,5561,856RevenueClearing and Settlement FeesTotal RevenueOperating ExpensesTaxNet Profit After TaxFinancial statements are prepared for the NZCDC Group and subsidaries. A copy of the NZCDC Group auditedfinancial statements for the period ended 31 December 2013 is included in section 9 of this annual report. Theincome statement does not include expenses in respect of technology services, technology platforms and otherservices, which are provided by NZX for nil consideration. In addition, clearing house infrastructure assets areon the balance sheet of NZX, for which the NZCDC Group incurs no maintenance fees or depreciation.Interest earned represents income on risk capital and working capital maintained in the NZCDC Group.Participant fees include annual fees.7

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statements4 RegulatoryRegulatory OverviewNZCDC and its subsidiaries operate a settlementsystem that is declared to be a settlement systemunder Part 5 of the Reserve Bank of New Zealand Act1989. In addition to providing settlement certainty,the Act provides for regulatory oversight by thejoint regulators, RBNZ and the Financial MarketsAuthority. Conditions to designation of the NZCDCsettlement system are set out in the Reserve Bankof New Zealand (Designated Settlement System –NZCDCL) Order 2010.The conditions of designation impose severalobligations on NZCDC, which include: Notification of material non-compliance with lawsor regulation, the NZCDC financial resourcespolicies or the NZCDC risk management policiesPublication of an audit report on the settlementsystemPublication of self-assessments against relevantinternational standards for settlement systems,central securities depositories and centralcounterparty clearing housesMonthly reporting to the joint regulators of keyoperational statistics andPublication of financial statements and an annualreport for NZCDCThe conditions of designation also refer to specificpolicies covering risk management, financialresources and specified agreements to whichmembers of the NZCDC Group are parties.NZCDC is required to provide the joint regulators withnotification in advance of any amendments to thesepolicies or agreements.8During the period, NZCDC advised the joint regulatorsof the following changes: Investment Policy - the Investment Policy wasupdated to simplify exposure limits and to modifyinstruments that risk capital is able to be investedinBusiness Continuity Plan – the BusinessContinuity Plan was updated to reflect the changeof the trading system and changes to contactdetailsDeed of Commitment – the Deed of Commitmentbetween NZCDC and NZX was varied to allowNZCDC to call on additional risk capital from NZXSecondment Agreement – the SecondmentAgreement between NZCDC and NZX was variedto extend the period of the secondment and toupdate the agreement as a result of staff changesRisk Capital Paper – the Risk Capital Paperwas changed to include updates to historicalinformation, additional stress test scenarios andtrading in equity derivativesClearing and Settlement Procedures – theClearing and Settlement Procedures werechanged to allow for the clearing of equityderivativesDelegated Authority Policy – the DelegatedAuthority Policy was updatedNZCDC complied with the conditions of designationthroughout 2013.

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statements5 GovernanceLegal and Corporate StructureNZCDC BoardNZCDC, a wholly owned subsidiary of NZX, operatesvia New Zealand Clearing Limited (NZCL), a clearinghouse under a central counterparty model. NZCDCalso operates via New Zealand Depository Limited(NZDL), a Central Securities Depository. Thedepository provides securities custodial services,and transactions accepted for clearing by NZCL aresettled in this depository. A nominee company, NewZealand Depository Nominee Limited acts solely asa bare trustee and holds legal title to securities andcash held in the depository.The NZCDC Board governs the overall operationsof the clearing house and the depository. A singlegoverning board is important to ensure that riskand operations are viewed and managed across thesystem as a whole, as well as within each business.The boards of the operating subsidiaries of NZCL,NZDL and Nominee operate when required to providelegal effect to action taken, or when decisions arerequired in respect of the operating subsidiaries.The legal structure of the NZCDC Group is showngraphically below: Board CompositionThe NZCDC Board currently consists of fourmembers with a constitutional limit of six. Pursuantto documented policies, NZCDC Board appointeesmust possess appropriate knowledge, specificallybanking and finance, markets, legal and compliance,information technology and risk management. Therewere no changes to the board during the period.Board MembersPip Dunphy (Chair/Independent) –Currently Pip isengaged as an independent director on a numberof company boards including Abano Healthcare,Fonterra Shareholders Fund, Solid Energy andNZ Super Fund. Pip is also chair of Mint AssetManagement. Previous roles have included ExecutiveDirector, Investment Banking and Head of DebtCapital Markets for Goldman Sachs JBWere, andHead of Capital and Risk Management, WholesaleFinancial Services with the Bank of New Zealand,Pip has extensive experience in capital markets,banking, finance, risk management and investmentmanagement.There has been no change to the corporate structureof the NZCDC Group in 2013.Peter Lockery (Independent) - Currently anindependent business consultant, Peter waspreviously the Chief Information Officer of ANZNational Bank Limited. Prior to that Peter held anumber of general management roles, including9

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statements5 Governance (CONT.)managed funds, human resources and technology.Peter was heavily involved in the integration ofRural Bank and Countrywide Bank following theiracquisition by The National Bank Ltd, and wasa director of a number of the bank’s subsidiarycompanies.Tim Bennett - Tim is CEO of NZX Limited and joinedthe NZCDC Board in 2012. Tim has almost 20 yearsfinancial services consulting experience, the majorityof which has been in Asia where his most recentrole was as a Partner in Oliver Wyman’s Retail andBusiness Banking practice. He has advised a broadrange of financial institutions with a particular focuson financial markets. Tim has worked with a numberof different exchanges, governments and privatecompanies in expanding domestic capital marketsand developing new asset classes.James Miller (Non-Executive) - James is DeputyChairman of the NZX Board of Directors and joinedthe NZCDC Board in 2012. ‘James is on the boards ofACC, Auckland International Airport and Mighty RiverPower. He is also a Board member of the FinancialMarkets Authority. James was previously on the ABNAMRO Securities Board, INFINZ Board, and FinancialReporting Standards Board. He was also a Directorand Head of NZ Wholesale Equities with CraigsInvestment Partners and brings 15 years’ experiencein capital markets.2013 Board Meeting Attendance RecordDirectorBoard AttendancePip Dunphy (Chair)6 of 7Peter Lockery7 of 7Tim Bennett7 of 7James Miller6 of 710Board CommitteesAudit and Risk CommitteeThe NZCDC Group Audit and Risk Committee functionis undertaken as part of the full Board responsibility.The NZCDC Board meets to consider the financialstatements and audit report and the independentauditor reports directly to the NZCDC Board. TheBoard meets with the independent auditor withoutNZCDC management being present.Credit CommitteeThe Board has established a Credit Committee toassist the Board in managing financial risk. Amongother things, the Credit Committee has responsibilityfor reviewing and approving amendments to marginrates, and reviewing and making recommendationsto the Board for the amendment of credit relatedpolicies and procedures, including margin andcollateral management procedures. The CreditCommittee meets on a quarterly basis or as requiredto consider specific risk related items as they arise,and has a delegated Board appointee.

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statements6 Financial Resources and Capital ManagementCapital ManagementNew Zealand Clearing Limited acts as centralcounterparty, and will settle transactions withclearing participants notwithstanding the default ofan individual participant. It is therefore crucial thatNZCL rigorously controls risk by having a robustrisk management framework and adequate financialresourcesRisk CapitalThe waterfall of capital available to NZCDC beginswith the initial and variation margin imposed byNZCL on all Clearing Participants as the mainrisk management measure for counterpartyrisk. Following this, NZCDC’s own equity, plus acommitment from NZX (jointly the “risk capital”) isheld to cover quantified risks over and above marginrequirements.The amount of risk capital required has beenestimated with reference to the ability of NZCL towithstand extreme but plausible market movements.Assessing the adequacy of capital relies onassumptions about which participant or participantsmight default and the market conditions at the timeof a default. Statistical methods are used to calculatethe risk capital required by taking into account varyingrisk factors and parameters. Stress testing of forecastrisk capital requirements takes place on a regularbasis and is reviewed by the Credit Committee, andthe full Board.Actual risk capital requirements (based oneach participant’s portfolio of open positions)are calculated and reviewed against estimatedrequirements and actual financial resources, on adaily basis and reported to the Board and regulatorsmonthly.Risk Capital CompositionRisk capital has been provided by way of paid upcapital of 10 million. Risk capital is specifically ringfenced and can only be used to cover a shortfall in theevent of participant default.In addition, under a Deed of Commitment signed withNZX Limited, NZX shall, upon written request, providean additional amount of 7.5 million in risk capital,which can be extended to 10 million if required.Additional Liquidity SupportUnder a Memorandum of Understanding betweenNZX and RBNZ, NZCDC is eligible for backupliquidity support from the RBNZ, subject to NZCDCmaintaining its designation status and meeting theeligibility criteria for RBNZ counterparties. To accessthis liquidity NZCDC would need to hold discountablesecurities that can be sold via the liquidity facility ifrequired.Working Capital and Dividend PolicyNZCL and NZDL maintain working capital at anappropriate level given the nature of the respectivebusinesses. Under the current framework NZCDCcalculates the 12 week working capital requirements,adds an additional risk margin and uses this as thebasis for determining it has adequate resources. Anyadditional cash held in NZCDC over and above this ispaid to NZX by way of dividend, subject to the paid upcapital not falling below the boards assessment of theprudent level of capital required to ensure businesscontinuity.Compliance with PoliciesThe NZCDC Group has maintained its financialresources in accordance with documented policies,as outlined above.11

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statements7 Risk ManagementBackgroundNZCDC and its subsidiaries are exposed to a numberof risks in the normal course of business. The mostsignificant of these risks is through NZCL actingas central counterparty to trades occurring on NZXMarkets.Specific risk categories to which NZCDC is exposed toare detailed further below:Counterparty Credit Risk—Counterparty credit risk isthe risk of loss as a result of default by a participant.This is by far the biggest risk faced by NZCDC inproviding the central counterparty function. Thereare two dimensions to the counterparty credit risk: Principal risk: risk of loss on delivery of contractor payments from the defaulting participants; andReplacement cost risk: risk of loss as a result ofreplacing a defaulted transaction.Liquidity Risk—In some circumstances NZCLmust continue to make scheduled payment to thenon-defaulting participants even if one or moreof its participants defaults or faces operationaldifficulties. In such a situation NZCL would needto quickly access its available financial resources,including the defaulter’s margin collateral and riskcapital. Liquidity risk arises where NZCDC’s financialresources are not available on demand.Operational Risk—This is the risk of financial lossas a result of deficiencies in systems, controls,human error, management failure or disruption fromexternal sources such as natural disaster.12Settlement Bank Risk—For non-New Zealand dollarsettlement, the failure of a settlement bank wouldexpose NZCDC and its participants to potentiallosses.Risk Management ProcessesThe above risks are managed through the applicationof a risk management framework that covers policiesand procedures, risk identification and definition,assessment and measurement, and risk reporting.Risk management processes in respect of significantrisks are further detailed below.Counterparty RiskThe risk of clearing participant default is managedthrough a number of measures including: Participation Standards – Clearing participantsare required to have sufficient financial resourcesand robust operational capacity to meet theirobligations as participants. This includesminimum risk based capital requirements; Participant Supervision - Supervision proceduresin place to monitor that clearing participantsmeet the participation standards on an ongoingbasis; Margin Requirements – NZCL imposes marginbased on each clearing participant’s outstandingpositions. This covers the cash and derivativesmarket position. Margin rates are set to coverthe reasonably foreseeable one-day pricemovement in a normal market, with a confidencefactor of at least 99%. NZCL revalues ClearingParticipants’ outstanding positions at end-of-day

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statementssettlement prices and collateral provided at orabove the margin requirement. Eligible collateralincludes cash, performance bonds (issued byapproved banks subject to counterparty limits)and approved securities. At least 30% of aparticipant’s collateral requirement must belodged in cash. Settlement Practices - In the design of thesettlement mechanism for cash marketsettlement transactions, NZCDC achievesthe reduction in risk through regulating thesettlement cycles, utilising delivery versuspayment and the netting of settlementtransactions. Bank Exposure - To manage the concentrationrisk NZCDC limits its exposure to banks based ona fixed counterparty limit. Risk Capital – NZCL has determined a level ofcapital sufficiency such that if the largest clearingparticipant were to default in the face of thehistorically worst market movement, NZCL willhave sufficient financial resources to fully coverthe losses of the defaulting participant’s positionand ensure the ongoing operations. This analysisis calculated on the basis that the defaultingparticipant’s portfolio is a diversified marketportfolio.Operational RiskSystem and operational risk is managed throughpolicies, procedures and operating practices. Specificpractices include: Business Continuity Planning – NZCDC has aBusiness Continuity Plan designed to ensure thatit can continue to operate in the event of a majordisturbance or disaster. The plan is designedto create a state of readiness to provide animmediate response to a disaster or a continuityevent; Disaster Recovery – NZCDC systems operatedby NZX are primarily located at data centresin Auckland. A secondary site is located inWellington operating the same hardware andsoftware. The database upon which thesesystems reside is backed up on a real time basis. Depository Balances Audit—An annual review ofDepository balances is conducted by NZCDC’sexternal auditors. Operational Audit—An annual operationalaudit is conducted as required as a condition ofdesignation, and published externally.Identified risks have been managed in accordancewith documented policies.13

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statements8 Other InformationGlossaryThe following terms and abbreviations are used throughout this report.Term/AbbreviationDescriptionDepositoryThe Central Securities Depository operated by New ZealandDepository LimitedNZCDCNew Zealand Clearing and Depository Corporation LimitedNZCLNew Zealand Clearing LimitedNZDLNew Zealand Depository LimitedNomineeNew Zealand Depository Nominee LimitedRBNZReserve Bank of New ZealandNZXNZX LimitedDirectoryRegistered OfficeNew Zealand Clearing andDepository Corporation LimitedLevel 1, NZX Centre11 Cable StreetWellingtonNew ZealandTel: 64 4 472 7599Fax: 64 4 496 2893www.nzclearingcorp.comBoard of DirectorsPip DunphyPeter LockeryTim BennettJames Miller14AuditorsKPMG10 Customhouse QuayWellingtonTel: 64 4 816 4500Fax: 64 4 816 4600

New Zealand Clearing and DepositoryCorporation Limited2013 Annual Report and ConsolidatedFinancial Statements9 Financial StatementsFor The Twelve Months Ended 31 December 2013Directors’ Responsibility StatementThe Directors are responsible for the preparation, in accordance with New Z

2013 Annual Report and Consolidated Financial Statements I am pleased to present the NZCDC annual report for the 2013 year. 2013 saw significant growth in the value of cash market (up from 9b in 2012 to 14.6b in 2013) and derivatives (up from 38.8b in 2012 to 70.1b in 2013) obligations cleared and settled through NZCDC.

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