In 2011 as a result of joint effort of the Company and the State Atomic Energy Corporation ROSATOM for the first time in the history of the industry, a long-term syndicated credit was drawn from a group of international banks: Deutsche Bank AG, Bank of Tokyo Mitsubishi UFJ Ltd, Societe Generale, CJSC BSGV, JSC Nordea Bank, CJSC BNP Paribas, Natixis and ING Bank B.V. The credit amounted to USD 500 million and the crediting period equals 5 years with a LIBOR-based rate plus 2.24% annual interest rate. The credit was used towards financing current activities of the Company and implementing the State Atomic Energy Corporation ROSATOM projects aimed at developing the nuclear power engineering industry.
|Debt / EBITDA ratio||less than or equal to 3||0.9||1.5|
|EBITDA / interest costs ratio||not less than 3||21.0||17.9|
|Equity capital, billion RUR||not less than 3||20.9||19.1|
In accordance with the terms of the syndicated credit the Company is maintaining the level of financial covenants required by the banks. The actual values of covenants, provided in the table above, provide evidence of the Company's financial stability. During 2011 the situation in the capital market was favourable, which enabled the Company to maintain high diversification of creditors and reduce the cost of external financing in US dollars (actual weighted average cost of financing is 1.8 percentage points lower than the market statistics published by the Bank of Russia).
As a result, the Company's interest expenses in 2011 (795 million roubles) decreased by 21.1% on 2010 (1,008 million roubles) despite an increase in the annual average credit portfolio. The factors described above have influenced a decrease in interest expenses in the following way:
- annual average joint debt increased by 26% (the influence of the factor equals +16.4%);
- reduction of average credit interest rate dropped by 37% (the influence of the factor equals –37.5%);
Being an exporter of high-technology industrial products, in 2011 the Company sent a number of documents to the Ministry of Industry and Trade of the Russian Federation in order to reimburse a part of paid credit interest from the federal budget in accordance with the Decree of the Government of the Russian Federation as of 01 October 2011 № 357 "On approving the Regulations for partially reimbursing Russian exporters of industrial products the interest expenses on the credits obtained in the Russian credit organisations from the federal budget".
According to the results of the Company's paperwork review 1,059.69 million roubles have been reimbursed from the federal budget as part of credit interest expenses.
During 2011 the Company continued to improve the financial control and budget planning mechanisms. For instance, as part of implementing the State Atomic Energy Corporation ROSATOM's project "Improving the system of internal control of financial reporting" the Company designed and implemented the Policy for developing and implementing the system of internal control of financial reporting (ICS FR), which key objective is to provide a reasonable level of confidence to internal and external users in the accuracy of the financial reporting.
As a result of measures taken for developing and implementing ICS FR in the reporting year, the key control procedures that affect the accuracy of the financial reporting have been formalised and implemented and the responsibility for following these procedures and monitoring of ICS FR has been assigned. In addition, a schedule of activities for 2012 aimed at improving ICS FR and improving the quality of recording processes has been developed jointly with the State Atomic Energy Corporation ROSATOM.
As part of the programme of transformation of the finance and economic block (FEB) of the State Atomic Energy Corporation ROSATOM and its organisations, a range of activities have been organised with a view to improve existing long-term and mid-term planning processes, annual budget preparation and follow-up control and performance evaluation, including:
- updating and successfully utilising automated budgeting system based on modern technological platforms of SAP and 1C during the budget campaign;
- completing the implementation of industry-wide automated system of
mid-termplanning based on DION platform, which was successfully used for preparation of the mid-termplan for 2012-2016;
- developing the implementation of industry-wide planning systems at the enterprises of the second-tier financial responsibility “Sales and trading” centre of the State Atomic Energy Corporation ROSATOM.
In 2011 the Company introduced the following measures as part of the accounting processes:
- more stringent monitoring of the processes resulting in financial obligations has been introduced;
- the mechanism for separate accounting and monitoring of costs on the key functional lines of activities has been modified, which enabled the Company to establish an additional information basis for further cost optimisation;
- the transfer of planned and actual data from the Company’s own accounting and analytical systems into the industry-wide budget model format has been automated.