Misr For Central Clearing, Depository & Registry Dr. Tarek Abdel Bary Managing Director Corporate Actions Automation to reduce risk Presentation AMEDA conference Alex., April 27 th -29 th 2009

Contents  What is Corporate action means  Philosophy of introducing the service  Objective of Introducing the service  Types of the corporate actions  Cash dividends  Underwriting- Public offer- Private offer  Capital Increase - stock dividend  Capital Decrease  Privatization  Share swap  Managing the corporate actions risk

What is Corporate action means  Any event initiated by a corporation which impacts its shareholders When a publicly-traded company issues a corporate action, it is initiating a process that will bring actual change to its stock.  Corporate actions are typically agreed upon the company's board of directors and authorized by the shareholders.  Some examples are stock splits, dividends, mergers and acquisitions, rights issues

Philosophy of introducing the service  MCDR is the sole company in the Egyptian market that provide the clearing, settlement and Depository services of the Egyptian Public traded securities as well as the consequent re-registration process for that reason MCDR has unique possibilities in delivering corporate action services, as well as assisting shareholders in the exercise of their rights.  MCDR provides a wide range of services relating to issuers' corporate actions and the exercise of shareholder rights.

Objective of Introducing the service  Best suited automated systems to support the variety of corporate action events  Cash & Stock Dividend  Capital decrease / increase  Coupon Payment  Stock Merger & Split  Automatic allocation of corporate action benefits to customer accounts based on the real position to obtain their proper rights accurately and on timely manner.  Provide investors with different means to cope with their different needs ( cheques – Bank transfer – swift- ….)

Types of the corporate actions MCDR represents the issuance company in various corporate actions events which processed through MCDR automated systems: MCDR Integrated systems Issuer instruction Dividends distribution Underwriting Public/ Private offer Capital increase Stock dividends Capital Decrease Privatization Share swap

Cash dividends process Issuer MCDR/ Aff. And Inf. Dept. (2) Request of cash dividends Registry Dept. (4) Cash Dividends memo (5) Data entry of the request shareholders list in the record date Memo of Dividends bank acc (3) (1) Issuer general ` assembly Decision Data entry of the request Math and confirm data (6) Yes (7) No Dividends bank Accounting Dep. notification (8) Notification with the transfer (9) permission (10) Posting Coupon department (5)

Cash dividends process Coupon department Outsight dividends banks (47 branch) covering the sate chequesSWIFT Bank transfer ID card Issuing dividends receipt up to L.E. 50,000 Coupon Dep. Front office Filling the dividends request Coupon Dep. Back office Review & check Issuing the dividends receipt up on submitted request

Issuer general assembly Decision Securities Accounting Dept. Aff. And Inf. Dept. (2) Request (3) Verification of shareholders data (4) Capital increase memo + underwriters CD ATAT BTBT CTCT Issuer T Amendment of issue acc. issue acc. increase Issuer (1) (5) (6) (7) Credit client acc. Underwriting/ Public offer /Private offer

Issuer EGX Securities Accounting Dept.Aff. And Inf. Dept. (2) Request of Capital increase (3) Notification of issuer admission (4) Capital increase memo Registry Dept. (4) Capital increase memo ATAT BTBT CTCT Issuer T (9) Distribution (5) Initiate capital increase (6) increase issue account (7) preparing shareholders list in the record date Issuer general assembly Decision Approval of execution (3) (1) 8 Capital increase / stock dividend

Issuer EGX Sec. Acc. Dept. MCDR- Aff. And Inf. Dept. (2) Request (3) Notification Execution approval letter (4) capital decrease memo Registry Dept. (5) capital decrease memo ATAT BTBT CTCT Issue acc. T Cash dividend Dept. (9) Repatriation Payment (7) Initiate capital decrease (8) issue account decrease (6) preparing shareholders list in the record date Issuer general assembly Decision (3) (1) Capital Decrease

BrokersEGX (1) Give Buying (2) Register of Client orders MCDR Clearing Bank Credit Sett. Cash Account Cash Sett. (6) Compare orders with credit cash order (4) Sending order (5) Sending cash balances Canceling order yes Securities sett. (9) (7) Un sufficient cash (3) No (8) (9) Privatization

(6) Check Balances Sec.acc.dept Un sufficient balance Issuer (1) Request Aff. And Inf. Dept. (2) Share swap memo (7) No BrokersEGX (3) Give orders (4) Register of Client orders Canceling order Issuer A C C C T T T Issuer B C C C T T T (5) Sending order Share swap sett. Yes (8) Share SWAP

Managing the corporate actions risk Receipt of Corporate Action information. corporate action request be executed when the issuer submits the necessary authorized documents (Board of Directors or General assembly meeting decision) Distribution of Corporate Action information The issuer should notify the company with all related information accurately and on timely manner. Receipt of Corporate Action Instructions MCDR maintain a pro active client files for each Issuer MCDR has an efficient system of receiving and processing the issuer instructions information.

Managing the corporate actions risk Processing of Corporate Action Instructions All corporate instructions are processed on timely and accurately way to be able to managing the corporate actions effectively Clear statement of liability MCDR has the responsibly to compensate any client in the event of an error could result from wrong processing. Manual processing of the related data be limited to minimum level to reduce the likelihood of error as well as minimizing the potential losses

Any Question? Thank you