Organizations from Russia often publish reports: operational and financial, audited and unaudited, according to the standards of IFRS and RAS, annual and intermediate. To help sort out all this abundance, we have prepared a special material.
Who needs reporting and why
We list those, for whom companies prepare reports:
• Management and board of directors. Having a nice view of the action, that happen in business, management and the board of directors can make informed management decisions.
• Municipal services. Here the main users of the reports are the National Tax Service. (FTS) and the Federal State Statistics Service. It is fundamentally normal for the FTS to calculate the tax payments due, and the Federal State Statistics Service collects data, so that the government can track the dynamics of characteristics in various industries.
• Lenders. When issuing a loan or purchasing bonds, the lender is fundamentally aware, whether the borrower will be able to serve his duties. After the transaction, the lender will be able to track down the implementation of certain criteria - the covenant according to reports, in case of violation of which the loan can be reclaimed. For instance, "The Net Debt / EBITDA ratio must be no more than 4x" or "EBIT / interest payments must be no less than 2x".
• Current and potential shareholders. According to the reporting data, the financier can build an income forecast, present the amount of dividends, assess the likely hazards and make a decision, it is worth possessing the securities of the organization or preferring other securities.
Where to find company reporting
A non-public company can only prepare reports for internal use and send data to municipal institutions and banks upon request. For all others, reporting will be closed.
However, if the company wants to issue shares or bonds, then, according to the requirements of the exchange and the regulator, it will be forced to publish reports in free access. That is why these companies are called public.
Public Company Reports, usually, can be found on its official website in the section "Financiers". Often they are accompanied by a press release or presentation with excerpts on the main indicators and management comments..
At the beginning of the year, we conducted a survey and identified companies with the best, according to our view, corporate websites based on the beliefs of the section for financiers. These websites are comfortable, are understandable and contain all the necessary data, which is promptly updated. The list is seen in the table below, For more details on the mechanics of analysis, follow the link.
In addition, you can find reports on a special resource, where all publicly disclosed information is aggregated. The resource is called so: Corporate Information Disclosure Center.
What reports are of interest to the financier
All reports can be roughly divided into three huge categories: Financial, operating room and other.
Financial Statements
Financial statements contain the monetary characteristics of the company: assets and liabilities, Revenue, Spending, profit, etc.. In the Russian Federation, companies report in accordance with Russian Accounting Standards (RSBU) and Interstate standards of monetary accounting (IFRS).
The key difference between IFRS and RAS is, that IFRS consolidates (cut in) indicators of related companies. Large organizations constantly represent a group of organizations, therefore, organized reporting better reflects the real state of the company's money. In addition, the RAS report often lacks information on the movement of money., needed for the assessment of currency flows. Therefore, for financiers, the main value is the IFRS report., and RAS is used in the main municipal institutions.
From time to time, the RAS report is more important than IFRS. It happens., if the company is guided by it when determining the amount of dividends. For instance, the charter of Surgutneftegaz and Lenenergo states, that income from securities to holders of preferred shares is paid from income under RAS. In addition, profit under RAS is included in the dividend policy of VSMPO-AVISMA, Rosseti, Quadras and Nizhnekamskneftekhim.
Separately, we note the standard of US GAAP reporting. By its own structure, it is extremely similar to IFRS., but not interstate, but the American standard. Organizations from Russia can provide reports on it., whose shares are traded on the US stock exchanges. For example, US GAAP reports are prepared by Yandex, since historically the main volumes of trading in its shares take place on the US stock exchanges.
On the day the financial statements are published, the company's management often holds a teleconference with investors., in which he shares his plans and answers questions. Issuers usually post the recording of this conversation on the website in the same section., where is the archive of reports.
Some companies publish the Data Book on the website - a collection of financial and operational indicators in the form of an excel file. This is convenient for tracking metrics over time., transferring data to financial models and making forecasts.
Operational reporting
Regular publication of natural indicators is considered a good form for the company., such as production volume, production volume, increase in retail space, etc..
If the report does not include sales data, then it is called production. For example, such reports are published by MMC Norilsk Nickel. If the report includes sales data, then it is called operational.
Information can be broken down into segments. Retail chains can publish information separately for each store format, and agricultural holdings - separately by product category.
Typically, operational reports are released before financial statements or at the same time.. It allows you to assess the relationship between financial and physical indicators of the company, and also understand the reason for certain changes in revenue and marginality.
Other reporting
The most important in this category is the Issuer's Annual Report. Usually, this is a big and vivid report, describing in detail the activities of the company, her strategy, successes and points for growth. Such a report is published based on the results of the calendar year.. Consolidated financial statements of IFRS or US GAAP are usually attached to it..
ESG reports or Sustainability reports have become a trend in recent years. These are reports, in which the issuer talks about its achievements and plans in the field of reducing the negative impact on the environment, as well as social initiatives. These reports may be published separately, but can be fully or partially included in the annual report. They increase the attractiveness of the company's shares for investment funds., focused on greener assets.
Other reports include the Issuer's Quarterly Reports. This is mandatory reporting, in which the issuer describes in detail various information about the company, Management, counterparties, partners, subsidiaries, etc.. These reports are useful for in-depth analysis of the company and for building detailed financial models..
Also companies can publish industry reports, to acquaint investors and lenders with trends in the markets of presence. For example, MMC Norilsk Nickel and UMMC periodically publish reviews of non-ferrous metals markets.
How often do reports come out?
Financial and operating results are usually released quarterly. But some companies additionally disclose some of the information on a monthly basis.. ALROSA publishes sales data every month, and state banks Sberbank and VTB report financial results under RAS every month.
A number of companies publish reports only for half a year. These are PIK developers, LSR and Etalon Group, as well as RUSAL, En + Group, MMC Norilsk Nickel, M.Video, VSMPO-AVISMA, Beluga, Polymetal, Petropavlovsk and Raspadskaya.
RAS reporting is almost always released earlier, than IFRS, but sometimes there are exceptions. For example, Enel Russia publishes IFRS before RAS.
Annual and quarterly reports, as the name suggests, published once a year and once a quarter, respectively.
Is it possible to trust the information in the reporting
So that companies do not have the temptation to embellish their own results, financial statements are checked by a special organization - an auditor. The auditor assesses the statements for compliance with accounting standards (IFRS, RSBU or US GAAP) and makes expert judgment, which is usually given at the very beginning of the report. If there are any complaints about the reporting, then this will be indicated in the auditor's report in the section "Qualified Opinion".
The Big Four companies are considered to be one of the most reputable auditors.: Deloitte, PricewaterhouseCoopers, Ernst & Young и KPMG. Reporting, audited by one of these companies, will be trusted by the widest range of investors.
Auditor services are quite expensive, therefore some companies prefer to publish interim financial statements in an unaudited form. So do, for example, retailers Lenta and Magnit - they publish audited reports only on half-yearly basis.
