Financial risks

The table demonstrates the evaluation of risk importance and its dynamics, with due regard to existing risk passports and expertise according to the following scales:

Importance scale
Critical
Significant
Moderate
Risk importance dynamics
Increase of risk importance
Importance remains unchanged  
Decrease of risk importance

Risk type

Risk description

Measures minimizing the risk consequences

Evaluation of risk importance and its dynamics

Risks related to the monetary policy of the Russian Central Bank

The Russian Central Bank adheres to a moderately strict monetary policy focused on the reduction of inflation and sensitivity of economy to external factors (US and EC sanctions against Russia, reduced oil prices).

  1. Monitoring of the monetary policy of the Russian Central Bank.
  2. Preparation of proposals and anti-recessionary measures to ensure financial stability and soundness of the Company.

Risks related to the changes in currency rates

Changes in currency rates do not have a significant influence on operations and financial stability of the Company since the Company attracts borrowings and pays to purchasers and suppliers in domestic currency only. But still, with due regard to imported components in goods and equipment purchased by the Company, a significant currency rate boost will result in upsurge of produce prices.

IDGCInterregional Distributive Grid Company of Urals adheres to the policy of import substitution focused on the usage of solutions minimizing usage of imported equipment and materials, if needed, it reviews a possibility of concluding long-term contracts that do not stipulate price upsurges for equipment purchased for projects demanding imported equipment and materials.

 

Risks related to changes in interest rates

The Company borrowed money to finance its operations and investments. Therefore, the Company is subject to risks regarding increased interest rates on loans and borrowings. A sharp growth of interest rates on borrowings may lead to the growth of debt servicing for the Company.

Participation in auctions and conclusion of credit contracts with Russian largest banks able to provide a considerable volume of borrowings at relatively low rates.

Risks related to inflation impacts

Inflation has a negative influence on the financial and economic stability of the Company. The most important risks are:

  1. Increased interest rate risks resulting in the growth of debt servicing (though possibility of event arrival is quite low);
  2. Risks related to losses of receivables current value due to significant delay of payments;
  3. Risks related to increased costs of contractors’ services that results in increased expenses of the Company.

The Company controls expense growth within the planned period.

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