Sol Rusiprint
Full Name: 
Sol Rusi PJSC
Type of Entity: 
Enterprises (Non-Financial Organizations)
Taxpayer Identification Number (TIN): 

This document defines the general approach and list of criteria used by National Rating Agency in evaluating creditworthiness of enterprises. The new version of the methodology was approved by the Agency in April 2015.

The Agency understands an 'enterprise' as a company of non-financial (real) economic sector, that operates in the segments of mining and processing of natural resources, production of goods, construction, transport, energy, agriculture, as well as in trade and service sectors. The assessment of an enterprise's creditworthiness takes into account the initial differentiation of enterprises on three different industrial sectors (mining and production, trade, and services).

The assessment methodology is based on the scoring system. The result of a comprehensive analysis is the determination of credit rating of an enterprise.

Credit rating is determined by assessment of the probability of default and reflects the ability of a rated entity to maintain its obligations throughout the term to maturity. The higher the credit rating, the lower the probability of default, and the higher the entity's ability to meet its obligations.

An enterprise's rating is determined based on the initial information, including expert assessment of qualitative parameters and scoring assessment of rating model quantitative indicators.

The model includes the following sets of indicators:

SetTitleWeight of set
Set 1Business and Industry Risks26,50%
Set 2Corporate Governance Quality16,00%
Set 3Solvency Evaluation15,00%
Set 4Financial Stability Assessment20,50%
Set 5Profitability Evaluation14,00%
Set 6Turnover Assessment8,00%
Fines and BonusesCompleteness of Information Disclosure-5,00%
Fines and BonusesRealization of Events Affecting the Level of Reputational Risk-10,00%
Set 7Comparative Assessment5,00%

Business and industry risks set includes assessment of the following indicators:

  1. Assessment of the industry/market condition
  2. Supply and demand
  3. Factors regulating/limiting the activity
  4. Market position of the enterprise
  5. Type of enterprise
  6. The level of business diversification
  7. Years of operation
  8. Dependence on suppliers
  9. Dependence on customers
  10. Assessment of staff
  11. Condition of the fixed assets
  12. Assessment of business risks
  13. Assessment of macroeconomic and market risks

In the first part of the set (indicators 1-3) the Agency's analyst, on the basis of available information, estimates state and dynamics of the industry in which the enterprise operates; supply and demand on the market (in the industry) for products and/or services provided by the enterprise, their relation, changes in relation (deficit, overstocking); the presence of factors that substantially regulate and/or limit the company's activities (quotas, licensing, tariffs, anti-monopoly law, trade barriers on the export of Russian goods by the importing countries, dependence on government procurement, etc.). The Agency's industry reviews, available statistics on the industry and other documents are used for assessment.

In the second part of the set (indicators 4-11) the Agency's analyst, on the basis of available information, estimates market position of the enterprise, in particular, the share of manufactured and supplied for the consumer market products on the main assortment/types, the presence of a monopoly or privileged position on the market, the possibility of influencing on pricing; risks associated with the enterprise's ability to meet its obligations on its own (using own assets), it is determined whether the enterprise is part of a Group/holding company, and, if so, the place of the enterprise in it; the level of business diversification – the number of activities, product types and range, markets; term of operation of the enterprise on the market; dependence on suppliers/contractors and customers; staff (quality of the workforce, labor productivity, education level and qualifications, etc.); the degree of depreciation of fixed assets, the cost of repairs and depreciation expenses.

The third part of the set (indicators 12-13) includes an assessment of the enterprise's exposure to macroeconomic and market risks, as well as the sensitivity of the enterprise's activities to changes in the financial environment. The microeconomic risks are:

  • changes in taxation
  • customs risks
  • failure to get tender/quota/license
  • dependence on related industries
  • seasonality
  • pressure from competitors (dumping)
  • availability of raw materials
  • political risks
  • capital intensity
  • depreciation of production assets
  • dependence on government procurement and support
  • change of product line (due to obsolescence)
  • duration of new products development
  • asset restructuring, division
  • other

The macroeconomic factors are:

  • Macroeconomic indicators that define, directly or indirectly, the whole economic environment:
    • Change in GDP;
    • Change of Russia's sovereign rating;
  • Indicators that determine the value and amount of credit resources available for economic entities:
    • Change of the key rate of the Bank of Russia;
    • Change of the amount of loans for refinancing of credit institutions provided by the Bank of Russia
  • Indicators that determine dynamics of prices on products (services) and material resources:
    • Change in consumer price index
    • Change in producer price index
    • Change in composite construction price index
  • Indicators of economic (business) activity:
    • PMI in manufacturing
    • PMI in the service sector
    • PMI in construction
  • Indicators of prices on assets traded on the stock market:
    • Price indices of Russian shares
    • Price indices of shares traded on international markets
    • Price indices of bonds for measuring the debt market environment and market risks of bondholders, as well as potential value and attractiveness of borrowings for the issuers on the bond market
    • Indices of the currency value for measuring currency risks
    • Change in exchange value of individual securities (shares, bonds, etc.) in the enterprise's portfolio
  • Indicators of stock prices (indicative quotes) on commodity assets:
    • Change in prices for oil and gas
    • Change in prices for electricity
    • Change in prices for non-ferrous metals (nickel, copper)
    • Change in prices for ferrous metallurgy products
    • Change in prices for precious metals
    • Change in prices for coal
  • Indicators of the real estate market environment:
    • Renting cost of commercial (office, retail) real estate
    • Tenants occupancy rate of commercial (office, retail) real estate
    • Cost of commercial (office, retail) real estate acquisition, as measured by the capitalization rate of income
    • Cost of residential real estate sale

Corporate governance quality set includes assessment of the following indicators:

  1. Assessment of the quality of shareholders (owners)
  2. The level of business reputation
  3. Quality of management
  4. Existence and openness of reporting under IFRS
  5. The enterprise's openness and diversification of funding sources
  6. Quality of an auditor
  7. Quality and details of the development strategy

Financial analysis of an enterprise is divided into 4 sets: solvency evaluation, financial stability assessment, profitability evaluation, and turnover assessment.

The vast majority of indicators of financial analysis sets is classified as quantitative, the score for this indicators is calculated automatically on the basis of an indicator value, weight, and ration range. Exceptions are the unambiguous quantitative indicators – indicators of dynamics and trends.

The experience of assessing the financial condition of an enterprise under Russian Accounting Standards (RAS)'s reporting indicates that financial statements do not always fully reflect the features of an enterprise's business. In this connection, NRA can make reasonable adjustments to the key indicators of the model, which are applied if an enterprise's activity is not correctly reflected in its reporting. Such adjustments can have a significant impact on the final results of the analysis.

For each of the sets introduced a system of expert adjustments, which includes the assignment of an expert score on the set. Methodology defines the limits within which an indicator can be adjusted using the expert score. For each expert score defined a list of indicators, the assessment of which may be expressed in the assignment of an expert score on the set; the analyst shall formally prove the value of an expert score, which is determined based on a number of criteria.

When adjusting the indicators, the main criteria are those that form the basis for the transformation of indicators in the preparation of financial statements under IFRS, including the following basic principles:

  • Substance over form principle
  • Comparability of financial statements principle
  • Prudent valuation of assets at market value
  • Exclusion or separate analysis of intra-group transactions
  • Business continuity principle
  • Accrual basis for the recognition of income and expenses

In order to better reflect the indicators, NRA may adjust in the rating model the following accounting (financial) indicators:

  • Assets
  • Equity or net assets
  • Debt, including short-term and long-term debt
  • Net profit
  • Revenues, income
  • Net cost, expenses
  • Accounts receivable
  • Accounts payable
  • The cost of fixed assets
  • The cost of investments
  • Liquid assets
  • Assets of instant liquidity

Solvency evaluation set includes assessment of the following indicators:

  1. Working capital ratio
  2. Current liquidity
  3. Critical liquidity
  4. Accounts receivable to accounts payable ratio
  5. Quality of accounts receivable
  6. Quality of debt service
  7. Trend in liquidity

Solvency of an enterprise is the ability of an economic entity to meet its obligations on time and in full. Solvency is one of the key features of an enterprise's stable financial condition.

Solvency of an enterprise consists of two factors:

  • The presence of assets (property and cash) in amounts sufficient to pay off all the existing debts
  • The level of assets liquidity that is sufficient to transfer assets in cash to pay off all the debts, if necessary

The value of an expert score on the solvency set is determined on the basis of an expert assessment of the following factors:

  • The actual maturities of assets and liabilities
  • Assets to liabilities ratio on maturity
  • Opportunities to attract additional funding and refinancing
  • The actual level of assets liquidity
  • Diversification of assets and liabilities by types and objects
  • Detailed statements on liquid assets, credits, loans, other debt
  • Methods of management of accounts receivable and accounts payable, relationship with suppliers and customers
  • Methods, duration and amount of building construction and investments in business expansion
  • Forms of liquidity management, planning and forecasting of the basic liquidity indicators of an enterprise
  • Enterprise's plans for obligations repayment or attraction/allocation of shareholders' equity
  • Dynamics and volatility of liquidity indicators
  • The presence of subordinated and intra-group debt
  • The presence of unused credit limits and overdrafts

Financial stability assessment set includes evaluation of the following indicators:

  1. Autonomy ratio
  2. Equity ratio maneuverability
  3. Debt-to-equity ratio
  4. The level of permanent capital
  5. Non-current assets to net worth ratio
  6. Short-term debt to revenue ratio
  7. Debt service coverage ratio
  8. The proportion of short-term debt in liabilities
  9. Interest coverage
  10. Trend in financial stability

Financial stability is the stability of an enterprise's financial condition, based on the sufficient amount of equity in the financing sources structure. Sufficient equity proportion means that debt financing sources are used by an enterprise to the extent that they can be repaid on time and in full.

The value of an expert score on the financial stability set is determined on the basis of an expert assessment of the following factors:

  • The structure of capital and debt financing
  • The level of external debt and net debt of an enterprise
  • Volatility of debt load indicators
  • The cost of debt service
  • The probability of debt refinancing
  • Stability of relations with major creditors
  • Capital intensity
  • The structure of debt by funding maturity
  • Goals for which debt is attracted
  • Provision of credits, loans and other forms of funding by an enterprise's assets and guarantees of its shareholders and partners (assessment of the actual risks for creditors, and their understanding of their own risks due to working with the company)
  • Dynamics of capital load indicators
  • Correspondence between the strategy of an enterprise and its financial policy
  • The presence of the off-balance-sheet obligations
  • Volatility of the financial result and the need for additional reservation
  • The need for additional capital (capital intensity)
  • Duration of business and production cycles of an enterprise

Profitability evaluation set includes assessment of the following indicators:

  1. Gross profit margin
  2. Sales profit
  3. Net margin
  4. Return on assets
  5. Trend in profitability
  6. EBITDA margin
  7. Dynamics of revenue

Profitability is a relative indicator of the economic efficiency of an enterprise. Profitability of an enterprise comprehensively reflects the level of efficiency of the use of material, labor, financial, and other resources.

The value of an expert score on the profitability evaluation set is determined on the basis of an expert assessment of the following factors:

  • Accounting to financial results ratio
  • Compliance of financial statements with IFRS/RAS
  • The presence and proportion of paper profit or paper loss (that are not related to the actual cash flow of an enterprise)
  • A company's policy in terms of profit distribution and capitalization
  • Honesty and accuracy of reflection of expenses and revenues, usage of profit optimization
  • Accounting method of recording expenses and revenues
  • Features of accounting policy of an enterprise
  • The level of profitability of the industry, in which the enterprise operates
  • The level of influence of competition on pricing and margin
  • The impact of financing costs on profitability
  • The impact of base effect and seasonality
  • Correspondence between the financial result of an enterprise and its strategy and development stage

Turnover assessment set includes evaluation of the following indicators:

  1. Inventory turnover
  2. Accounts receivable turnover
  3. Accounts payable turnover
  4. Trend in turnover

Turnover ratios characterize the level of business activity of an enterprise, reflecting the funds or liabilities turnover rate. The higher the turnover, the more efficient the use of resources is.

The value of an expert score on the turnover assessment set is determined on the basis of an expert assessment of the following factors:

  • Duration of the operational cycle in the industry
  • Features and amounts of the required inventory
  • Features of sales and customers
  • Terms of shipment/sale
  • Terms of interaction with suppliers and contractors
  • The proportion of interest income and non-interest income in total revenue
  • The influence of financial transactions (repo, securities transactions, etc.) on accounts receivable and accounts payable of an enterprise
  • Features of the accounting policy of a company, including revenue recognition
  • Accounts receivable backup
  • Policy of raw materials management
  • Features of renumeration and motivation systems

Comparative assessment set includes assessment of the following indicators:

  1. EBITDA margin
  2. Net debt to EBITDA ratio
  3. Short-term debt to total debt ratio
  4. Capital to assets ratio
  1. EBITDA margin
  2. Net debt to EBITDA ratio
  3. Short-term debt to total debt ratio
  1. EBITDA margin
  2. Net debt to EBITDA ratio
  3. Short-term debt to total debt ratio
  4. Capital to assets ratio

Comparative assessment set determines the overall adequacy of an enterprise's performance in relation to the average market conditions, as well as, indirectly, forms an expert opinion on the effectiveness of the management team given the current economic situation. The set is based on a comparison of average industry indicators and relevant indicators of a particular enterprise.

The set is characterized by encouragement-penalty system for score calculation, i.e., if an indicator complies with the industry average, a zero score is assigned, and if it deviates from the average level – positive or negative scores are assigned in accordance with the predetermined linear function.

Completeness of information disclosure

NRA assesses the completeness of provided information in comparison with the list of the necessary information requested by the Agency for the rating procedure. Also estimated how detailed are the questionnaire answers, the quality of information about the strategy and plans of the enterprise, and the quality of information received within the rating interview.

Realization of events affecting the level of reputational risk

The factors that may lead to realization of reputational risk are:

  • failure to comply with the laws of the Russian Federation, enterprise's articles of association and by-laws, ordinary course of business, principles of professional ethics;
  • significant misreporting of the fair value of assets, enterprise's liabilities (including off-balance sheet) and capital, as well as revenues and profit;
  • withholding of information that should be disclosed in accordance with Russian legislation, or under contract with the Agency;
  • the enterprise's participation in conducting of illegal operations, legalization (money laundering) of proceeds of crime, terrorism financing, as well as other illegal activities carried out by dishonest customers, counterparties (contractors, partners), and (or) employees;
  • deliberate underestimation of investment risks, implementation of excessively risky investment and market policy, as well as other actions leading to possible damage to customers, counterparties, and, consequently, the enterprise's business reputation;
  • presence (appearance) of a conflict of interest, about which the company did not inform its customers, counterparties, or other interested parties, in the authorized manner;
  • public or judicial conflicts and disputes on corporate governance;
  • claims from the state authorities, judicial proceedings, with the imposition (potential imposition) of fines in the amounts significant for the business (in relation to the enterprise and/or its owners);
  • negative publicity in the media about the enterprise, its employees, owners, top managers, and affiliates, the accuracy of which is considered to be adequate by the Agency.

The Rating Committee may decide to assign a new or revised rating different from that implied by the rating model. This is possible when the following overriding factors are present:

1) favorable or adverse changes in the external environment (political, macroeconomic or market risks, competitive environment or legal risks);

2) the rated enterprise is a clear outlier (a leader or a low-performer) among peers; its performance differences from peers have not been fully captured by the set of comparative measures, there are clear advantages stemming from the enterprise’s monopoly position or market competition restrictions, or risks associated with barriers to market access;

3) the clarity of value disclosure in the enterprise’s reporting documents is inadequate or inconsistent, hindering the financial performance analysis and requiring additional expert review;

4) substantial change in indicators required by the rating model, that has occurred after the reporting date and has not been (may not or should not be) captured by the current rating model, although is going to affect the model at a later stage;

5) subsidiaries that are highly dependent on and tightly controlled by parent entities , or the parent’s poorly diversified assets – in cases where the risks of the rated enterprise fully depend on those of a third-party company. The rating may be based on the score implied by the parent’s rating model (as, for example, in the case of operating subsidiaries, including specialized companies that are subsidiary to universal entities), or based on a key operating company’s rating model (for enterprises that have large subsidiaries).


Российская шкала НРА