Analysis of receivables and payables

Total receivables of the Company, minus bad debt reserve, at the beginning of the reported period totaled RUB 8,379 million, reaching RUB 8,833 million by the year-end. The increase was mainly influenced by grown transmission receivables impacted by revenue boost. Receivables from customers and contractors totaled RUB 8,458 million (+ RUB 1,494 million or +21% YoY). Advances paid reached RUB 18 million (- RUB 20 million or -53% YoY). Other receivables amounted to RUB 357 million (- RUB 1,020 million or -74% YoY). Such lowering is impacted by a returned Commercial Court deposit and inflows from assignment of claim agreements.

Total receivables:

Electricity transmission receivables contributed 91% to the Company’s total receivables. Overdue claim administration, performed by the Company during 2016, has resulted in 1,178 positive judgments worth RUB 3,121 million and 100 negative judgments worth RUB 116 million, namely:

• electricity transmission: 164 positive judgments worth RUB 2,894 million (RUB 2,690 million principal debt, RUB 204 million interest, incl. use of someone else’s cash in line with Art.395 of the Russian Civil Code, contract penalties, legal interest and other fines);
• technological connection: 104 positive judgments worth RUB 114 million (RUB 97 million principal debt, RUB 17 million interest, incl. use of someone else’s cash in line with Art.395 of the Russian Civil Code, contract penalties, legal interest and other fines);
• other (incl. no-contract consumption): 910 positive judgments worth RUB 113 million (RUB 97 million principal debt, RUB 16 million interest, incl. use of someone else’s cash in line with Art.395 of the Russian Civil Code, contract penalties, legal interest and other fines).

Therefore, the share of satisfied overdue receivable claims of the Company is 96%. To collect transmission receivables upon positive judgments in 2016 RUB 2,159 million writs of execution were issued, with RUB 2,113 million or 95% redeemed.

Total payables:

Short-term and long-term liabilities at the beginning of the year totaled RUB 9,671 million, reaching RUB 8,311 million by the year-end. Payables underwent the following changes:

• Suppliers and contractors: payables reached RUB 4,688 million (- RUB 1,200 million or -20% YoY) due to reduced payables owed to: building contractors (- RUB 405 million), repair contractors (- RUB 6 million), electricity transmission suppliers (- RUB 403 million), electric and thermal power suppliers in terms of loss compensation (- RUB 460 million) and increased payables due to other suppliers and contractors (+ RUB 74 million). The contraction was mainly due to repayment of overdue payables owed to regional grid operators and electricity suppliers in terms of loss compensation;
• Taxes and levies: payables amounted to RUB 1,239 million (+ RUB 449 million or +57% YoY) due to increased VAT and income tax liabilities;
• Advances paid: payables totaled RUB 1,201 million (- RUB 545 million or -31% YoY);
• Other payables: payables totaled RUB 1,183 million (- RUB 64 million or -5% YoY) affected by lowered long-term connection advances and increased short-term liabilities.