Credit histories of individuals and legal persons (or subjects of a credit history) contain collected, processed, accumulated and stored data concerning fulfilment of commitments under loan agreements, or other contracts or obligations. Special business entities, credit bureaus, are engaged in this activity. According to the State Register of Credit Bureaus which is maintained by the Central Bank of the Russian Federation, there are 17 entities of the kind in Russia.
The article 6 On credit histories of the Federal Law No.218-FZ from December 30, 2004 (as amended on July 3, 2016) Provision of a credit report regulates obtaining information from the credit history in the form of a credit report.
Credit bureaus are entitled to provide a credit report at a credit history user’s request based on a contract of information services provision, concluded between a user and a credit bureau. In order to become a credit history user a person has to receive a written or other recorded consent from the subject of the credit history to get a credit report, with an obligatory statement of purposes of obtaining such information. The consent is valid for 2 months, or during the whole loan agreement period.
A credit report can only be provided in the form of an electronic document with a digital signature.
Credit history users are obliged to hold information confidential.
In practical terms, the procedure of obtaining data from a credit history might be as follows:
- 1) in order to get full information of the counterparty’s loan sources one should turn to the Central Catalogue of Credit Histories. It is a department of the Central Bank entitled to maintain the database of title parts of credit histories (surname, name, patronymic, passport data, tax number – INN, insurance individual account number). As a result, one can get a complete list of credit bureaus keeping the details of the counterparty’s credit history.
Any credit bureau can conduct this search.
2) in order to get the details of the counterparty’s credit history, one should turn to a certain credit bureau, conclude an agreement for information provision, register with an e-service, create an account and pay for the service. Besides, one should provide and pay for all technical, software and communications resources required for using of the e-service.
The mandatory requirements for getting a detailed credit history are:
- a written consent of the subject for receiving a credit report, stating the purposes for obtaining this information;
- a digital signature;
- installed encryption software to ensure safe transfer of personal data;
- a safety certificate in accordance with the legislation on personal data.
Information agency Credinform represents an overview of trends in the field of the extraction of gravel, sand, clay and kaolin.
Enterprises with the largest volume of annual revenue (TOP-10 and TOP-2000) were selected for the analysis, according to the data from the Statistical Register for the latest available periods (for 2015 and 2016). The analysis was made on the basis of the data of the Information and Analytical system Globas.
Legal forms and unreliable data
The most spread legal form of enterprises in the industry is a limited liability company. Public joint-stock companies and Non-public joint-stock companies also make a significant part. (Picture 1).
According to the results of investigation of the Federal Tax Service of the RF, 4,5% of companies in the industry have records of unreliable data entered into the Unified State Register of Legal Entities. (Picture 2).
The revenue of 10 industry leaders made 22% of the total revenue of 2000 the largest companies in 2016. It points to a sufficiently high level of competition in the industry. DONSKOI KAMEN LLC became the largest company in terms of revenue in 2016 (Picture 3).
The best results in the industry in terms of revenue for the ten-year period were achieved in 2008. During the crisis periods in the economy in 2009 -2010 and 2012-2014 there was a decline in the industry average indicators. (Picture 4).
Profit and loss
The volume of profit of 10 industry leaders made 37% of the total profit of TOP-2000 companies in 2016. The leading position in terms of profit volume in 2016 is taken by BOGAEVSKII KARYER NJSC (Picture 5).
Industry average values of the profit indicators of companies in the industry for the ten-year period are not stable. Decrease in indicators was observed in 2008 - 2009, 2013 - 2014 against the background of crisis phenomena in the economy. At the same time, in 2009, 2010 and 2014 the indicators had negative values. The industry showed the best results in 2007 (Picture 6).
There were 619 loss-making enterprises observed in 2015 among TOP-2000 companies. In 2016 their number increased to 623 or by 1%. At the same time, the average size of their loss increased by 9%. For the rest of TOP-2000 companies the average profit margin increased by 24% for the same period (Picture 7).
Key financial ratios
Over the ten-year period the average industry indicators of the total liquidity ratio were during 8 years below the interval of recommended values – from 1,0 to 2,0. (marked in yellow in the Picture 8).
The total liquidity ratio (the relation of the amount of current assets to short-term liabilities) shows the sufficiency of company’s funds for repayment of its short-term liabilities.
Solvency ratio (the relation of the amount of own capital to the balance sum) shows the company's dependence on external borrowings. Recommended value is > 0.5. The value of the ratio below the minimum value means a strong dependence on external sources of funds’ receipt.
The experts of the Information agency Credinform, taking into account the actual situation both in the economy as a whole and in sectors, has developed and implemented in the Information and analytical system Globas the calculation of practical values of financial ratios that can be recognized as normal for a particular industry. For companies in the field of the extraction of gravel, sand, clay and kaolin the practical value of the solvency ratio is from - 0,04 to 0,87 in 2016.
Over the ten-year period the industry average indicators of the ratio were below the recommended value and in the interval of practical values (Picture 8).
For the last ten years the instability of return on investment ratio was observed. In periods of crisis phenomena in the economy (in 2009, 2010, 2014, 2015) the indicators decreased up to negative values (Picture 9). The ratio is calculated as the relation of net profit to the sum of own capital and long-term liabilities and demonstrates the return on the equity involved in the commercial activity and the long-term borrowed funds of an organization.
Within the same period the products profitability ratio was rather stable (Picture 9). The highest indicators were in the years 2007, 2012 - 2013. The ratio is calculated as the relation of profit from sales to expenses for ordinary activity. In general, profitability reflects the economic efficiency of production.
Indicators of the asset turnover ratio over a ten-year period demonstrate relative stability with periods of gradual decline and growth (Picture 10).
Asset turnover ratio is calculated as the relation of sales proceeds to the average value of total assets for a period and characterizes the efficiency of use of all available resources, regardless of the sources of their attraction. The coefficient shows how many times a year a complete cycle of production and circulation is made, yielding profit.
Equity turnover ratio is calculated as the relation of revenue to average annual amount of equity and shows the intensity of use of the whole part of assets.
There is a significant decrease in the indicators of this ratio in 2013 - 2016 (Picture 10).
The great majority of companies in the TOP-2000 have a broad specialization in the development of gravel and sand quarries, extraction of clay and kaolin (Picture 11).
Dynamics of business activity
Over the 25-year period the registered companies from TOP-2000 list are unequally distributed by the year of foundation. The largest number of enterprises in the industry was established in 2014 (Picture 12).
Business took the greatest interest to the extraction of gravel, sand, clay and kaolin in the period after 2010. (Picture 13).
Main regions of activity
The companies of the industry are unequally distributed across the country. Their largest number is registered in Krasnodar territory by the location of the largest deposits of the corresponding natural resources (Picture 14). TOP-2000 companies are registered in 84 regions of Russia.
The great majority of companies in the industry is concentrated in the Central Federal District of the country (Picture 15).
The share of companies with branches or representative offices from TOP-2000 enterprises is 1,6%.
Activity of participation in arbitration proceedings
More than 40% of companies of the industry do not participate in arbitration proceedings. The same part of companies participate in a negligible number of arbitration cases. (Picture 16).
In terms of the presence of signs of «fly-by-night companies» or unreliable organizations, the great majority of enterprises of the industry demonstrate an extremely low risk of cooperation (Picture 17).
Financial position score
An assessment of the financial position of companies in the industry shows that the more than half of enterprises are in an unstable and critical financial situation (Picture 18).
Almost a third of companies of the industry (32%) show the highest level of bankruptcy risk in the short-term period (Picture 19).
Almost half of the companies from 2000 the largest enterprises have got Adequate/Weak Solvency index Globas. More than a fifth of companies have got Unsatisfactory/Poor and Insufficient Solvency index Globas (Picture 20).
Thus, a comprehensive assessment of enterprises on the extraction of gravel, sand, clay and kaolin, taking into account the main indices, financial indicators and ratios, points to unfavorable trends in this field of activity.