6.4

Financial and Economic Performance
of the Company

Dynamics of the Company Liquidity Figures in 2012–2014

Dynamics of the Company Liquidity Figures in <nobr>2012</nobr>–<nobr>2014</nobr>

Dynamics of Quick Assets and Liabilities in 2012–2014, mln RUB

Dynamics of Quick Assets and Liabilities in <nobr>2012</nobr>–<nobr>2014</nobr>

The Company liquidity figures are at the level sufficient to ensure due fulfilment of the Company`s liabilities.

Following the results of 2014, there is a trend for increased liquidity level. This dynamics is considered positive and evidences improvement in the Company`s solvency status.

In view of liquidity risk management, the Company has been maintaining sufficient amount of funds to perform the obligations, which is achieved through competent planning and analysis of cash flows across JSC Tyumenenergo and in each of its branches.

The Company Financial Stability and Business Indicators

Designation Calculation method 31 December 2012 31 December 2013 31 December 2014
Показатели финансовой устойчивости
Equity to Total Assets ratio Equity / Total liabilities

Line 1300, Form 1 / Line 1700, Form 1		 0,80 0,84 0,82
Current assets coverage ratio* (Current Assets - Accounts Receivable above 12 months- - Current Liabilities) / Current Assets

(Line 1200, Form 1 - Line 1231, Form 1 - Line 1500, Form 1) / Line 1200, Form 1		 -0,70 -0,04 0,06
Total Debt to EBITDA ratio Long-term Loans + Short-term Loans) / EBITDA

(Line 1410, Form 1 + Line 1510, Form 1) / EBITDA		 1,65 0,84 0,99
Показатели деловой активности
Accounts receivable (AR) and payable (AP) growth ratio TAR = Total value of Accounts Receivable at the end of the reporting period / Total value of Accounts Receivable at the end of the base period
TAP = Total value of the current Accounts Payable at the end of the reporting period / Total value of the current Accounts Payable at the end of the base period

TAR = Line 1230, Form 1 - report. per. / Line 1230, Form 1 - base per.
TAP = Line 1520, Form 1 - report. per. / Line 1520, Form 1 - base per.
TAR/TAP = (Line 1230, Form 1 - report. per. / Line 1230, Form 1 - base per.) / (Line 1520, Form 1 - report. per. / Line 1520, Form 1 - base per.)		 1,31 1,12 0,97
Total AR and AP ratio Total AR at the end of the reporting period / Total AP at the end of the reporting period

Line 1230, Form 1 / (Line 1450, Form 1 + Line 1520, Form 1)		 0,43 0,56 0,56
The most liquid AR and AP ratio The most liquid AR at the end of the reporting period / AP to suppliers and contractors at the end of the reporting period

(Line 123201, Form 1 + Line 123206, Form 1) / (Line 1521, Form 1 + Line 1528, Form 1)		 0,88 0,92 0,96

*Low (negative) value of the current assets coverage ratio is due to sectoral specificity of the Company`s operations, namely, existence of a significant amount of accounts payable on advances received under the network connection. It is worth noting that repayment of such payables is carried out after performance by the parties of their obligations in full and after actual connection of the consumer.

Following the results of 2014, financial stability and business activity indicators demonstrate the Company`s low dependence on the loans, and are at a sufficient level, reaffirming the status of JSC Tyumenenergo as a reliable borrower, and efficiency of the monetary policy implemented by the Company.

Debt Portfolio Management

JSC Tyumenenergo operations in the field of raising loans are carried out according to the approved JSC Tyumenenergo Regulations for Credit Policy, and JSC ROSSETI S&A Debt Position Management Standard, whereby there has been established the system of limits on the amount of debt capital that help forecasting the Company`s solvency, financial stability and creditworthiness and determine the management powers for implementation of credit operations.

Tyumenenergo`s organization of high-quality financial planning allows it to ensure conformity of the debt position indicators to the established limits, and compliance with the Company`s financial sustainability targets.

Tyumenenergo`s loan portfolio is built up taking into account implementation of the Company`s debt policy major indicators.

Indicator 2012 2013 2014 2014 to 2013
Debt, mln RUB 13 907 10 205 11 505 12, 74%
Net debt, mln RUB 10 909 8 269 5 415 -34, 51%
Debt*/EBITDA* 1,65 0,84 0,99 17, 86%
Net debt/EBITDA 1,30 0,68 0,47 -30, 88%

* Debt = Long-term loans and credits (Line 1410, Form 1) + short-term loans and credits (Line 1510, Form 1) + Collaterals issued (Line 5810, Note 5.8)

** EBITDA = Net profit + Income tax and other similar mandatory payments + Interest payable + Depreciation

Debt, mln RUB,
Debt / EBITDA

Debt, mln RUB, Debt / EBITDA

Net debt, mln RUB,
Net debt / EBITDA

Net debt, mln RUB, Net debt / EBITDA

According to the results of 2014, the ratio of Debt/EBITDA is 0.99. The growth of this ratio is due to an increase in the debt on credits and loans. At the same time, reduction in the net Debt/EBITDA ratio is associated with decrease in the net debt due to significant growth of values of the most liquid assets at the end of the period (the amount of short-term financial investments and cash).

Tyumenenergo`s financial policy in the area of debt financing is aimed at maintaining the minimum cost of credit facilities with preferential increase in the debt portfolio maturity.

In 2014, in order to refinance previously incurred investment costs, JSC Tyumenenergo raised loans within the existing facility agreements totalling 3,302 mln RUB.

Also in 2014, JSC Tyumenenergo repaid investment loans issued in 2011 by Sberbank of Russia ahead of schedule, to the amount of 2,000 mln RUB. Because of the loan repayment, the amount of the current accounts payable reduced, and the average maturity of the Company`s debt portfolio increased.

Thus, during the reporting period, debt on the loan portfolio of JSC Tyumenenergo increased by 12.8% from 10, 201 mln RUB to 11, 503 mln RUB.

Dynamics of Loan Liabilities and Weighted-Average Interest Rate, mln RUB

Dynamics of Loan Liabilities and Weighted-Average Interest Rate, mln RUB

Long-term debt dominates the structure of loans of JSC Tyumenenergo. Increase in short-term debt on the loans is due to switching of the part of long-term debt on previously raised loans to short-term debt amounting to 2,834 mln RUB.

In the context of financial market downturn in 2014, owing to its policy being implemented, JSC Tyumenenergo has managed to maintain a weighted average rate of the loan portfolio at a low level in the conditions of market growth of lending rates. During the reporting period, the Company`s weighted average interest rate increased slightly from 7.77% to 7.90%.

Partner banks of the Company in the field of crediting are the largest banks of Russia — Sberbank, Gazprombank, and VTB Bank. Participation of these banks in the loan portfolio is the evidence of JSC Tyumenenergo financial stability and the banks` confidence in the Company`s reliability and good standing.

Loan Portfolio Profile In Terms of Creditors as of 31 December 2014

Loan Portfolio Profile In Terms of Creditors as of <nobr>31</nobr> December <nobr>2014</nobr>

Despite the significant changes in the market environment and the situation in financial and debt markets, JSC Tyumenenergo has retained the required level of financial stability that allows it to raise a sufficient amount of loans for investment activities and that ensures unconditional observance of the commitments to creditors.