Article
The Federal Tax Service identified the signs of shell companies

According to the Federal Tax Service of Russia as of March 1, 2019, four million companies are registered in the Unified State Register of Legal Entities (EGRUL). Herewith, from the total number of registered companies, about 187 thousand or 4,7% are entities with fictitious signs.

According to the Federal Tax Service of Russia, unreliable companies have the following signs:

  • trading address of the company is not at the place of registration;
  • the residence of company’s management is not at the place of registration;
  • frequent change of company’s place of registration;
  • no lease agreements with the premises owners;
  • short-term business activity;
  • the company (or individual entrepreneur) is represented by trustees registered in another region of the RF;
  • change of company’s management just before the submission of tax accounts;
  • inaccurate information on address, director, shareholder in EGRUL;
  • directorship or shareholders are non-residents of Russia;
  • the company’s head has no income;
  • submission of zero accounting for several periods;
  • the equality of income and expenditure with minimum profit;
  • VAT offset ratio is more than 98%;
  • lack of employees / single employee in the accounting;
  • submission of tax returns with incorrect amendment serial number;
  • lack of current accounts after registration of the company;
  • closure of all bank accounts of the company;
  • the company has more than 10 bank accounts;
  • cash flow without account balances;
  • registration of the company and opening of the accounts in different regions;
  • failure to appear in tax authorities for interrogations more than two times.

The signs above are taken into account in the complex evaluation index by shell company signs in the Information and Analytical system Globas. The index is available for subscribers in the relevant section of company's report.

Article
Activity trends of Orenburg companies

Information Agency Credinform presents a review of activity trends of the largest real economy companies from the Orenburg region.

Orenburg companies with the largest annual revenue (TOP-1000) have been selected for the analysis, according to the data from the Statistical Register for the latest available accounting periods (2012 — 2017). The analysis was based on the data from the Information and Analytical system Globas.

Net asset value indicates fair value of corporate assets and is calculated annually as assets on balance less company’s liabilities. Net asset value is negative (insufficiency of property) if liabilities are larger than the property value.

Table 1. The largest real economy companies from the Orenburg region with the largest and the smallest net assets in 2013 – 2017
No. in TOP-1000, Name, INN, activity Net asset value, billion RUB Solvency index Globas
2013 2014 2015 2016 2017
1 2 3 4 5 6 7
1 ORENBURGNEFT JSC
INN 5612002469
Extraction of crude petroleum
In process of reorganization in the form of acquisition of other legal entities, 26.03.2019
up248,35 up350,30 up447,41 up506,24 up593,48 226 Strong
2 GAZPROM DOBYCHA ORENBURG LLC
INN 5610058025
Extraction of natural gas and gas condensate
up39,70 down38,62 up42,27 down41,23 down31,74 236 Strong
3 URAL STEEL JSC
INN 5607019523
Manufacture of crude iron, ferroalloy, steel
up22,04 up26,35 up29,29 up29,61 down28,84 225 Strong
4 GAI MINING AND PROCESSING CO JSC
INN 5604000700
Mining and dressing of copper ores
up16,50 down15,18 up17,37 up18,88 down16,66 252 Medium
5 GAZPROM NEFT ORENBURG LLC
INN 5610218014
Extraction of crude petroleum
up6,67 up6,69 up8,32 up10,13 down9,86 311 Adequate
996 LLC Named After 11 KAVDIVISION
INN 5638027411
Mixed farming
A bankruptcy claim was filed against the company
up-0,02 down-1,00 down-1,07 up-1,00 down-1,07 400 Weak
997 ORSKII VAGONNYI ZAVOD LLC
INN 5614023224
Manufacture of railway locomotives and rolling stock
Process of being wound up, 26.06.2017
down-0,12 down-1,90 down-3,06 up-0,95 down-1,08 600 Insufficient
998 AGROFIRMA KRASNOKHOLMSKAYA LLC
INN 5609044589
Growing of cereals
A bankruptcy claim was filed against the company
down0,04 down-0,32 down-1,07 down-1,14 down-1,19 450 Unsatisfactory
999 SOUTH URAL MINING AND PROCESSING COMPANY LLC
INN 5607015014
Manufacture of cement
down-0,11 down-0,80 down-1,47 down-1,71 down-1,97 297 Medium
1000 ORENBURG AIRLINES JSC
INN 5638057840
Non-scheduled passenger air transportation
Process of being wound up, 23.06.2017
up1,35 down-0,32 down-7,55 down-15,75 down-17,54 600 Insufficient

Up — growth compared to prior period, Up — decline compared to prior period.

Average net assets of TOP-1000 companies tended to increase during the last 5 years (Picture 1).

Picture 1. Change in average net assets of TOP-1000 companies in 2013 – 2017 Picture 1. Change in average net assets of TOP-1000 companies in 2013 – 2017

The share of TOP-1000 companies with insufficiency of property tends to increase within the last 5 years (Picture 2).

Picture 2. Share of TOP-1000 companies with negative value of net assets Picture 2. Share of TOP-1000 companies with negative value of net assets

Sales revenue
In 2017 sales revenue of 10 industry leaders in the region amounted to 62% of total revenue of TOP-1000 companies (Picture 3). This is an indicator of a high level of industrial concentration in the Orenburg region.

Picture 3. TOP-10 companies by their share in 2017 total revenue of TOP-1000 companies Picture 3. TOP-10 companies by their share in 2017 total revenue of TOP-1000 companies

In general, average industry revenue tends to increase (Picture 4).

Picture 4. Change of average industry revenue of TOP-1000 companies in 2013 – 2017 Picture 4. Change of average industry revenue of TOP-1000 companies in 2013 – 2017

Profit and loss
In 2017 net profit of 10 regional industry leaders amounted to 83% of total net profit of TOP-1000 companies (Picture 5).

Picture 5. TOP-10 companies by their share in 2017 total net profit of TOP-1000 Picture 5. TOP-10 companies by their share in 2017 total net profit of TOP-1000

In general, during the 5 years average industry profit of TOP-1000 companies tended to decrease (Picture 6).

Picture 6. Change in average profit of TOP-1000 companies in 2013 — 2017 Picture 6. Change in average profit of TOP-1000 companies in 2013 — 2017

During the last 5 years average industry net profit of TOP-1000 companies decreased, and the average net loss increased (Picture 7).

Picture 7. Change in average net profit and loss of TOP-1000 companies in 2013 — 2017 Picture 7. Change in average net profit and loss of TOP-1000 companies in 2013 — 2017

Key financial ratios
During the last 5 years average values of total liquidity ratio of TOP-1000 companies were above the recommended value — from 1,0 to 2,0, tending to increase (Picture 8).

Total liquidity ratio (a ratio of current assets to current liabilities) reveals the sufficiency of a company’s funds for meeting its short-term liabilities.

Picture 8. Change in average values of total liquidity ratio of TOP-1000 companies in 2013 — 2017 Picture 8. Change in average values of total liquidity ratio of TOP-1000 companies in 2013 — 2017

During the last decade, average industry values of return on investment ratio was relatively high, tending to decrease (Picture 9).

It is a ratio of net profit to total equity and noncurrent liabilities, and it demonstrates benefit from equity engaged in business activity and long-term raised funds of the company.

Picture 9. Change in average values of return on investment ratio of TOP-1000 companies in 2013 — 2017 Picture 9. Change in average values of return on investment ratio of TOP-1000 companies in 2013 — 2017

Assets turnover ratio is a ratio of sales revenue to average total assets for the period, and it measures resource efficiency regardless of the sources. The ratio indicates the number of profit-bearing complete production and distribution cycles per annum.

During the last 5 years, this activity ratio tended to decrease (Picture 10).

Picture 10. Change in average values of assets turnover ratio of TOP-1000 companies in 2013 — 2017 Picture 10. Change in average values of assets turnover ratio of TOP-1000 companies in 2013 — 2017

Structure of production and services
Crude petroleum and gas extraction enterprises and metal producers have the largest shares in total revenue of TOP-1000 companies (Picture 11).

Picture 11. Types of activity by their share in total revenue of TOP-1000 companies Picture 11. Types of activity by their share in total revenue of TOP-1000 companies

78% of TOP-1000 companies are included in the Register of small and medium-sized businesses of the Federal Tax Service of the Russian Federation. Their share in total revenue of TOP-1000 amounted to 16% that is lower than on national level (Picture 12).

Picture 12. Shares of small and medium-sized enterprises in TOP-1000 companies' revenue, % Picture 12. Shares of small and medium-sized enterprises in TOP-1000 companies' revenue, %

Key regions of activity
TOP-1000 companies are registered in 39 districts and settlements of the region and are unevenly located throughout its territory. 68% of the largest enterprises by revenue are located in the regional center: Orenburg, Buzuluk and Buzuluk district (Picture 13).

Picture 13. Revenue of TOP-1000 companies by districts of the Orenburg region Picture 13. Revenue of TOP-1000 companies by districts of the Orenburg region

Financial position score
Assessment of financial state of TOP-1000 companies indicates that most of the companies have stable or above average financial position (Picture 14).

Picture 14. TOP-1000 companies by their financial position score Picture 14. TOP-1000 companies by their financial position score

Solvency index Globas
The majority of TOP-1000 companies have got a superior, high, strong or medium Solvency index Globas, that indicates their capability to meet liabilities timely and in full (Picture 15).

Picture 15. TOP-1000 companies by Solvency inde Globas Picture 15. TOP-1000 companies by Solvency inde Globas

Index of industrial production
According to the Federal State Statistics Service, in 2018 the trend of increase in index of industrial production is observed in the Orenburg region (Picture 16). Average month-to-month index value is 98.3%

Picture 16. Index of industrial production in the Orenburg region in 2018, month-to-month (%) Picture 16. Index of industrial production in the Orenburg region in 2018, month-to-month (%)

According to the same data, the share of the Orenburg region in all-Russian revenue from sales of goods, products and services amounted to 0.66% for 2018.

Conclusion
A comprehensive assessment of the largest real economy companies of the Orenburg region, that considers key indexes, financial figures and ratios, is indicative of negative trends (Table 2).

Table 2. Positive and negative trends, TOP-1000 assessment factors
Trends and assessment factors Relative share of the factor, %
Rate of growth (decline) of average net assets up10
Increase/ Decrease of share of companies with negative net assets down-10
Level of concentration of capital down-10
Rate of growth (decline) of revenue up10
Rate of growth (decline) of average net profit (loss) down-10
Increase/ Decrease of average net profit of companies down-10
Increase/ Decrease of average net loss of companies down-10
Increase/ Decrease of average total liquidity ratio up5
Increase/ Decrease of average return on investment ratio down-5
Increase/ Decrease of average assets turnover ratio, times down-10
Share of small and medium-sized business within the region by revenue over 22% down-10
Regional concentration down-10
Financial standing (majority share) up10
Solvency index Glogas (majority share) up10
Index of industrial production up5
Average factors' value down-2,3

Up — positive trend (factor), Up — negative trend (factor).