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4.1 Entrepreneurship and Property
4.1.7. Generalisation of the experience
of land reform
ARTICLES
OF ASSOCIATION
Nizhni Novgorod Interregional
Joint Stock Land Bank
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I. General Provisions.
The Nizhni Novgorod Interregional Joint Stock Land Bank,
hereinafter referred to as the Bank, is established in
accordance with the decision of the shareholders' meeting
(Minutes No 1 of June 10, 1992), and proceeding from the
Enactment of the Council of Nizhni Novgorod oblast session
of June 3, 1992. The Bank shall be a crediting institution,
acting on a commercial basis, ensuring self-repayment,
enjoying the right to attract financial resources and
property as mortgage on the conditions of urgency, interest
payment, and to redeem, offering loans against mortgages
of
land and real estate. The Bank shall also redeem bonds,
ensured by deposited property, funds securities, and other
objects for investing. The Bank shall remain within Russia's
integrated banking system.
2. The Bank shall be created in the form
of a closed joint-
stock company. The volume of shareholders' deposits for
formation of the initial charter fund shall be defined by
the meeting of shareholder-founders and the statutory
agreement. The term of functioning of the Bank is not
limited.
3. The aim of creating the Bank shall be
to develop the
agro-industrial sector of the economy of Nizhni Novgorod
oblast and Russia, to render financial and credit support
to
effective farms, speed up privatization in agriculture,
buy
land from unprofitable collective farms and state farms,
and
land plots, fixed in the private property of collective
farm
members, workers and employees of state farms.-
4. The Bank sets the following goals:
4.1. Crediting of agricultural, processing,
construction and
other enterprises of different property forms, against land
and real estate mortgages.
4.2. Creating a financial base for economic,
information,
legal and other support of enterprises of the Agro-
Industrial Complex.
4.3. Financing of new technologies for the
Agro-Industrial
Complex.
4.4. Attracting of foreign investments to
the Agro-
Industrial Complex of Nizhni Novgorod oblast.
5. Attracting of enterprises, organizations
and natural
persons to the Bank as shareholders shall be performed on
a
voluntary basis.
6. A shareholder may quit the Bank upon
his request, on the
basis of a decision by a shareholders' meeting. The
shareholder shall give the Council and the Board of the
Bank
three months' notice. The values of shares shall be redeemed
proceeding from its assessment as of the time of its issue
by the Bank. A shareholder's departure from the Bank shall
be regulated by the General Assembly of shareholders and
the
statutory agreement.
7. Decisions about transfer to servicing
in the Bank shall
be taken by enterprises and organizations with the Bank's
agreement.
8. The Bank shall be a legal entity, have
an independent
balance sheet, and shall act on the basis of self-accounting
and self-financing. The Bank shall acquire the rights of
a
legal entity from the time the Articles of Association are
registered at the Main Department of the Central Bank of
Russia in the Nizhni Novgorod Oblast. The
Bank can conclude
agreements on its behalf, acquire property and personal
non-
property rights and bear obligations, act either as a
plaintiff or as a defendant in an arbitration court.
Information about establishment of the Bank shall be
published in the press.
9. In a set procedure and upon coordination
with the Central
Bank of Russia the Bank can open affiliates, subsidiary
enterprises and representations in Russia and abroad and
give them the rights within the Articles of Association
of
the Bank, without transferring them the rights of a legal
entity (with the exception of subsidiary enterprises). The
affiliates and representations of the Bank act on the basis
of the Regulations approved by the Bank. The heads of the
affiliates and representations shall be appointed by the
Board of the Bank.
10. The Bank shall be liable for its obligations
with all
its property. Shareholders of the Bank shall be liable for
its obligations by the paid shares. The state shall not
be
liable for the Bank's obligations. The Bank shall not be
liable for the obligations of the state, enterprises,
organizations and natural persons.
11. In its activity the Bank shall be regulated
by the Law
of the RSFSR "On Banks and Banking in the RSFSR",
land
legislation of the RF, Provisions on Shareholding companies
in the RSFSR, approved by the Enactment of the RSFSR Council
of Ministers of December 25, 1990, normative documents of
the Central Bank of Russia, the present Articles of
Association and the statutory agreement.
12. Clients' financial resources and other
property kept at
the Bank, including deposits of individuals, can be seized
and become subject to recovery on the basis of and according
to a procedure stipulated by the current law.
13. The staff of the Bank and shareholders'
representatives shall not disclose operations or the status
of the accounts of the Bank itself or its clients. Information
on operations and status of the accounts in the Bank can
be given to the owners of the accounts, their higher bodies,
judicial and prosecuting bodies, institutions of the Central
Bank of Russia and financial bodies in compliance with the
set procedure. Information on the deposits and operations
on the citizens' deposits shall be given to the clients
and to: - courts, bodies of preliminary investigation and
inquiry on the current criminal cases and where according
to the law confiscation of property can be applied; - courts
on current civil cases, subsequent to criminal cases, cases
on recovering alimony (when there is no income or other
property to be recovered), or on division of a deposit,
which previously was in the joint property of the spouses;
- state notary's offices on their current cases of inheritance
and deposits of dead depositors.
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14. The Bank shall have a seal with its
name and emblem on
it, can have a registered trademark, forms with its name
and
trademark.
The location of the Bank shall be Nizhni
Novgorod.
II. The Bank's Assets
15. The Bank's assets consist of the charter
fund, with
deduction of the costs of the capital assets, investments
into shares and stocks of other banks, enterprises,
organizations and immobilized assets; reserve and other
funds, in which the amount of deductions, order of
formation, and usage are determined by a Shareholders'
Meeting.
16. The Charter Fund of the Bank shall amount
to
100,000,000-- (one hundred million) roubles and should be
formed within one year from the time the Bank is registered.
A founder which does not manage to fulfil its obligation
in
paying off the cost of the shares within 30 days, loses
its
right to obtain the shares after the prescribed term, and
the Council of the Board has the right to independent sale
of these shares among the stock-holders of the Bank as not
bound by subscription. Other sanctions can be applied to
the
defaulted shareholders of the Bank upon the decision of
the
Shareholders' Meeting. Shares worth 1,000 (one thousand)
roubles each shall be distributed among the shareholders
by
signing in the statutory agreement. At least 50% of the
cost
of the shares should be redeemed during the first month
from
the time of registration of the Bank. The shares shall be
paid for by the shareholders by means of depositing into
the
cash department or on the Bank's current account of cash
or
non-cash resources in roubles or foreign currency,
transferring into ownership or leasing to the Bank property,
material values, a land share, by means of transferring
property to the Bank by means of succession or by other
means stipulated in the statutory agreement. The Charter
Fund of the Bank can be increased upon a decision of the
Shareholders' Meeting by raising the cost of the shares,
introducing new shareholders into the Bank, or additional
acquisition of shares by the Bank shareholders. The Charter
Fund shall be evaluated in roubles. The rouble equivalent
of
the hard currency deposit shall be determined from the
commercial rate of the Central Bank of Russia. Upon
fluctuations of the Central Bank of Russia rate the margin
of the rouble appraisal of the hard currency deposit shall
be transferred to the balance account of the Bank's "Special
Purpose Fund". Estimation of the deposit value shall
be made
by joint decision of the founders. The deposit evaluated
in
roubles constitutes the share of a participant in the
Charter Fund.
17. The Reserve Fund shall be created upon
a decision of the
Shareholders' Meeting to ensure the fulfillment of the
bank's obligations and to cover possible losses in the
Bank's operations by means of annual allocations from profit
and by means of shareholders' deposits.
III. Ensuring the Interests of the Clients
18. The Bank shall constantly be ready to
timely and fully
pay out its liabilities through regulating its balance in
compliance with the normatives set by the Central Bank of
Russia. The Bank shall deposit in the Main Department of
the
Central Bank of Russia in Nizhni Novgorod Oblast a part
of
its financial resources in the fund for regulation of credit
resources of Russia's banking system in compliance with
the
norms determined by the Central Bank of Russia.
IV. Credit Resources of the Bank
19. Credit resources of the Bank shall be
formed from:
- the Bank's own assets (with the deduction
of the cost of
the acquired capital assets, deposits of shares of other
banks, enterprises and agencies);
- resources of enterprises and agencies
that are kept on the
Bank accounts, including the resources attracted as time
deposits of both Russian and foreign legal and natural
persons;
- credits of other banks;
- individuals' deposits, attracted for a
definite term and
demand deposits;
- other resources attracted;
- redistribution, within one operational
year, of profit.
V. Operations of the Bank
20. To perform operations and keep financial
resources the
Bank shall open a correspondent account at an institution
of
the Main Department of the Central Bank of Russia in Nizhni
Novgorod Oblast.
21. The Bank shall mobilize the available
financial
resources of enterprises and agencies and shall keep such
on
current, deposit and other accounts. The Bank shall ensure
the security of the accepted financial funds. The funds
shall be paid back to enterprises and agencies within the
terms set up in the agreements. The deposits of the citizens
shall be returned upon their demand.
22. The Bank shall perform crediting of
enterprises,
agencies and corporations proceeding from the principles
of
urgency, redeeming and interest payment of the credits.
Credits offered by the Bank shall be secured by mortgage
of
property, land, and mortgage of enterprises in compliance
with land laws, as well as guarantees, warranties, and
liabilities determined by the Bank.
23. The Bank can finance the agro-industrial
complex and
effect payments in the agro-industrial complex in accordance
with the aims and goals of the Bank, and in strict
compliance with the norms on the construction terms and
terms of investments redemption. All the payments from the
clients' accounts, including payments in the budget and
for
wages shall be performed by the Bank in the procedure set
by
the current law.
24. The Bank can, in a set procedure, perform
crediting, payments, and other operations connected with
foreign economic activity. Operations of the Bank and its
clients on attracting and investing foreign currency resources
in the form of credits, loans, deposits, contributions and
other forms should be licensed by the Central Bank of Russia.
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25. The Bank can:
- participate with its assets on a shareholding
basis in the
economic performance of enterprises and agencies;
- represent interests of enterprises and
agencies, with
their authorization, in financial and economic bodies;
- perform payments on the commission of
its clients and
corresponding banks, and render them cash services;
- open and process the accounts of its clients
and
corresponding banks, foreign ones inclusive;
- issue, buy, sell and hold payment documents,
securities
(cheques, shares, bonds, bills, letters of credit, etc.),
and perform other operations with them;
- issue warranties, guarantees and other
liabilities on
behalf of third parties, stipulating monetary execution;
- acquire the right of demand in goods delivery
and
services, take the risks of fulfillment of such demands,
encash such demands (forfeiting), as well as perform such
operations with additional control over the goods movement
(factoring);
- participate in creation of joint ventures
and other
organizational and legal forms of the clients' activities,
with the right to obtain revenues, corresponding to the
Bank's contribution;
- attract and invest funds, and manage securities
on
clients' commission (trust operations);
- buy from Russian and foreign legal and
natural persons and
sell them cash foreign currency kept on the accounts and
in
the deposits;
- attract and allocate precious metals and
gems in the
deposits, and perform other operations with such valuables
in compliance with international banking practices;
- upon requests by enterprises and agencies,
to purchase and
transfer to them on leasing conditions equipment, means
of
transport, and other property;
- buy and sell in Russia and abroad precious
metals and
gems, and related jewelry;
- offer brokers' and consultancy services;
- perform other operations and deals with
the permission of
the Bank of Russia, granted within the limits of its
competence.
All the operations stipulated in item 25
can be carried out
both in roubles and in foreign currency.
26. The relations of the Bank with its clients
shall be
built on a contract basis.
27. The Bank has the right to:
- receive from the credited enterprises
and agencies
accounts, balance sheets and documents confirming their
solvency, as well as the liquidity of the granted credits;
- on the basis of agreement with its clients
to set, in
accordance with the Central Bank of Russia instructions,
interest rates for active and passive operations, as well
as
the amount of commission for rendering the services;
- discontinue further payment of credit,
and demand to
redeem the credit before the expiry date, upon breach of
obligations stipulated by the credit agreement;
- in the cases determined in the law, declare
enterprises
and agencies non-solvent, and make proposals on their
reorganization;
- demand expert appraisal of project decisions
in
construction, expanding, reconstruction and technical
reequipping of the sites, which are to be carried out by
attracting the resources and credits of the Bank.
VI. Redistribution of Profit of the Bank
28. After payment, in accordance with the
current law, of
taxes to the budget, deductions in the Funds of the Bank,
and payment of the dividends to the shareholders, the profit
shall enter into the Bank's disposal, shall become its
property and shall be used in the procedure determined by
the Shareholders' Meeting.
VII. Management of the Bank
29. The supreme body of management of the
Bank shall be the
Shareholder's Meeting. The Council of the Bank shall be
created, which will perform general management of the Bank's
activities and will be elected by the Shareholders' Meeting.
Management of the Bank's current activities shall be
performed by the Board, elected at the Shareholders'
Meeting. Members of the Board can not simultaneously act
as
members of the Council of the Bank.
30. Shareholders' meetings shall be carried
out on a regular
and special basis. Regular meetings shall be summoned
annually, within at least a month after the balance sheet
of
the Bank for the reporting year is drawn up. The interval
between regular meetings shall not exceed 15 months. Special
meetings of shareholders can be summoned at the demand of
shareholder-founders, the Council of the Bank, auditing
commission or shareholders possessing over 20% of the votes.
Notification about the Meeting and other
materials related
to it shall be forwarded to the shareholders at least two
weeks prior to the Meeting.
31. All the shareholders have the right
to be present at the
Meeting. One share gives a shareholder one vote in decision-
making on the issues discussed at the meeting, and the right
to obtain corresponding dividends. A shareholder can
transfer his vote to another shareholder, his
representative, as well as a third person by authorization.
None of the shareholders can possess more than 35% of the
total votes. The Meeting is competent to make decisions
on
the issues submitted to it, if shareholders possessing more
than 2/3 of the votes participate in such a meeting. The
decisions of the Meeting shall be taken by majority vote
of
the shareholders participating in the Shareholders' Meeting.
Decisions of the Meeting on the issues of
changing the Articles of Association of the Bank, creation
and discontinuation of the activity of its affiliates and
representations, or discontinuation of the Bank's performance
shall be taken by 2/3 of all the shareholders' votes.
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32. The Shareholders' Meeting:
- determines major directions of the Bank's
activities and
conditions for attracting deposits and granting credits;
- takes decisions on increasing the number
of shareholders
and their departure from the Bank;
- elects and recalls members of the Council
and Chairman of
the Council (President) of the Bank, the Board and Chairman
of the Board of the Bank, and the Auditing Commission for
a
three year term;
- elects the Chairman of the Board of the
Bank for a three
year term;
- determines the Charter Fund;
- approves the Articles of Association of
the Bank,
provisions on the Board of the Bank, Auditing Commission,
and amends them;
- examines and approves the annual balance
sheet of the
Bank, profits and losses accounts for the past year of
operation, conclusions and report of the Auditing
Commission;
- makes decisions on creation and reorganization
of
affiliates, representations and subsidiary enterprises of
the Bank, and approves their provisions;
- distributes the profit of the Bank;
- makes decisions on discontinuation of
the Bank's
activities, appoints the liquidation commission, and
approves the liquidation balance;
- makes decisions on the Banks' acquisition
of its shares;
- makes decisions on suing for property
accountability of
the Bank's officials;
- resolves other issues of the Bank's performance.
The Shareholders' Meeting has the right
to delegate a part
of its authority to the Council of the Bank.
33. The Council of the Bank:
- determines major directions of the Bank's
activities;
- performs control over the performance
of the Board of the
Bank;
- determines the structure and the number
of staff of the
Bank, its affiliates and representations;
- performs control over the Bank's performance;
- approves the accounts of auditing of financial
and
economic activity of the Board, held by the Auditing
Commission upon assignment from the Council;
- performs certain functions, entrusted
to it by the
Shareholders' Meeting.
34. The Council of the Bank shall be convoked
by its
Chairman at least quarterly. Extraordinary sessions of the
Council of the Bank shall be held upon the proposal of at
least 1/3 of its members or those of the Auditing
Commission. The Council of the Bank shall be deemed to have
met its quorum if at least 2/3 of its members are present
at
the session.
35. Decisions of the Council of the Bank
shall be taken by
majority vote. In case of a tie vote, the vote of the
Chairman of the Council of the Bank shall be deciding one.
36. The Board of the Bank shall be the executive
body of the
Bank, managing its current activities.
The Board of the Bank:
- organizes and manages the operational
activity of the Bank
and ensures fulfillment of the decisions of the Meeting
and
the Council of the Bank;
- employs, trains and utilises the staff;
- approves the provisions on the Bank's
structural
divisions;
- examines and makes decisions on the issues
in compliance
with its Provisions, approved by the Shareholders' Meeting.
37. The Board of the Bank is competent to
make decisions on
all the issues submitted to it if at least 2/3 of the
members of the Board are present at the session. Decisions
shall be adopted by majority vote. In case of a tie vote,
the vote of the Chairman of the Board shall be the deciding
one. In case of disagreement with the adopted decision,
members of the Board communicate their opinion to the
Council of the Bank.
38. The Chairman of the Board of the Bank:
- manages the Bank's performance on the
basis of collective
leadership and undivided authority in accordance with the
authority vested in him by the Council of the Bank, and
participates in the work of the Council of the Bank with
an
associative vote;
- issues instructions on the issues related
to the Bank's
activities;
- disposes, in compliance with the current
legislation, of
the assets and funds of the Bank, concludes and signs
agreements, liabilities, and issues authorizations on behalf
of the Bank;
- in accordance with the quantity and estimation
of costs,
approved by the Council of the Bank, approves the personnel
arrangement, and determines wages rates;
- appoints personnel according to the set
nomenclature,
dismisses them, provides pay bonuses, gives incentives to
good workers, and imposes disciplinary penalties;
- divides the duties between his deputies, and determines
the level of responsibility of the deputies and heads of
structural divisions for the fields of work entrusted to
them.
VIII. Accounting and Reporting of the Bank
39. Accounting and circulation of documents
in the Bank shall be organized in accordance with the rules
set by the Central Bank of Russia. The Bank shall provide,
to the Main Department in Nizhni Novgorod Oblast of the
Central Bank of Russia, statistical reports in the form
and within the deadlines stipulated by the rules of the
Central Bank of Russia relating to the activities of commercial
banks.
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40. The results of the Bank's performance
shall be reflected
in monthly and annual balance sheets, in the profit and
loss
report, and in the annual report, which are submitted to
the
institution of the Central Bank of Russia. Annual balance
sheets and profit and loss reports of the Bank, after their
auditing, shall be approved by the Shareholders' Meeting
and
must be published in the press.
41. The operational year of the Bank shall
begin on January
1 and end on December 31.
IX. Auditing and Inspection of the Bank's
Performance
42. Auditing of the Bank's performance shall
be carried out
by the Auditing Commission of the Bank. Members of the
Council or the Board of the Bank, as well as other persons
holding any posts at the Bank, cannot be elected to the
Auditing Commission.
The members of the Auditing Commission shall
be responsible
for the honest fulfillment of their duties in the procedure
defined by the current legislation. In the process of
executing the Auditing Commission's functions the Commission
can employ experts who do not hold any posts at the Bank.
The Auditing Commission inspects the Bank's
observance of
legislative and other acts, regulating its performance,
organization of interbank control, credit, current, currency
and other operations carried out by the Bank over the year,
and the status of cash department funds and property.
The Auditing Commission submits to the Shareholders'
Meeting
the auditing report (and a copy to the Main Department of
the Central Bank of Russia in Nizhni Novgorod Oblast),
supplemented, if necessary, with recommendations on
liquidation of shortages, and a resolution on the conformity
of the balance sheet and profit and loss report submitted
to
the Commission to the actual situation at the Bank with
recommendations on their approval.
Auditing and inspections of financial and
economic
performance of the Board shall be carried out both in
accordance with the plan approved by the Auditing Commission
and on instructions from the Shareholders' Meeting, the
Board of the Bank, or by the request of shareholders
possessing at least 10% of the votes. Proceeding from the
results of the auditing, the Auditing Commission has the
right to demand that the Shareholders Meeting, the Council
or the Board of the Bank be convoked.
43. The Central Bank of Russia shall control
the performance
of the Bank. The Main Department of the Central Bank of
Russia in Nizhni Novgorod Oblast, financial agencies and
other agencies shall inspect the Bank's performance in
accordance with the current legislation.
X. Discontinuation of the Bank's Activity
44. The Bank's activity shall be discontinued
upon a
decision of the Shareholders' Meeting, and also in other
cases envisaged by the Russian legislation. The assets of
the liquidated bank, after paying off the wages to the Bank
personnel and fulfilling the obligations before its
depositors, the budget, banks and other
creditors, shall be
distributed between the shareholders in proportion to the
value of their shares.
45. Information on discontinuation of the
Bank's activity
shall be published in the press.
46. Changes and additions to the present
Articles of
Association approved by the Shareholders' Meeting shall
be
drawn up and registered in the due procedure.
For and on behalf of the Shareholders' Meeting
Chairman of the Board,
Nizhni Novgorod Interregional Joint Stock Land Bank
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