CJSC AK&M Rating Agency assigned the ‘A’ (stable outlook) credit rating to OJSC TAIF-NK as per the national scale.

The ‘A’ rating indicates that OJSC TAIF-NK is qualified as a highly reliable borrower. Risk of a delay in meeting liabilities is relatively low, restructuring risk for the loan / part of the loan is minimal.
OJSC TAIF-NK is a modern oil refining complex including an oil refinery, a gasoline plant and a gas condensate processing plant. OJSC TAIF-NK is the pivotal component of the oil and gas refining business of TAIF Group. OJSC TAIF-NK produces 97% of petroleum products of Republic Tatarstan and is one of the largest suppliers of resources to petrochemical facilities in the region.
The company’s authorized capital is RUB 5,851 million.
The company’s principal performance indicators are as follows:
For the 1st half year 2011, OJSC TAIF-NK produced goods for RUB 67 billion. In comparable prices, the output growth rate was 103.7% year-on-year. The company sold goods for RUB 65 billion.
Exports accounted for 49% (by volume) or 46% (by value) of the goods sold by the company.
In the first half year 2011, the Company secured a net profit of RUB 7.5 billion. Sales margin was 15%.
OJSC TAIF-NK has achieved a good development momentum. In several recent years, the technological workflow of OJSC TAIF-NK’s oil refining complex underwent considerable improvements benefiting from a large-scale modernization of the acting production facilities and the new oil refining capacities placed in operation. With these efforts, the capacity and efficiency of the oil refining process was improved, the product range expanded. Both technical and economic indicator of the company’s activity respond to that positively. Revenue of OJSC TAIF-NK is found to have been steadily growing in recent years. In the first half of the year 2011, sales revenue of the company reached RUB 65 billion, exports accounting for RUB 30 billion of that amount. For reference, sales revenue for the first half year 2010 was a mere RUB 47 billion. The total sales result for 2010 was RUB 94 billion, RUB 43 billion coming from exports.
The rating score is essentially supported by the stable growth of the company’s assets. As of June 30, 2011, OJSC TAIF-NK’s assets exceeded RUB 45 billion increasing by 24% from what they had been at the start of 2011 (RUB 36 billion).
The high rating score of OJSC TAIF-NK also appreciates the company’s good short-term liabilities to revenue ratio (0.17 in 2010, 0.29 in the first half year 2011). These favorable values prove the company’s ability to repay its obligations with an annual revenue.
OJSC TAIF-NK's profit before taxes and depreciation (EBITDA) for the first half year 2011 was RUB 10.6 billion almost reaching the EBITDA for 2010 (RUB 11.8 million). Pre-tax profit for the first half year 2011 was RUB 9.404 billion exceeding its pre-tax profit for 2010 (RUB 9.4 billion). Net profit of the company for the first half year 2011 was RUB 7.5 billion, also high above the result achieved in the first half year 2010 (3.6 billion) and even surpassing the net profit level for the whole 2010 (RUB 7.4 billion).
Net assets of OJSC TAIF-NK for the first half year 2011 rose by 26% from RUB 20 billion to RUB 25.2 billion.
Liquidity ratios indicate a sound financial standing for the company. Absolute liquidity ratio for the first half year 2011 was 0.44.
The high skills of its employees, the efficient management and the introduction of innovative oil refining technologies are also positive development drivers for OJSC TAIF-NK.
The company has achieved a wide diversification of the range of goods produced ensuring steady consumer demand and hence steady revenue, which is also an argument for the rating score.
Principal risk factors for OJSC TAIF-NK are as follows:
Current obligations of the company according to its report for the first half year 2011 rose by 21% to RUB 19.3 billion. Early in the year, they amounted to RUB 15.9 billion. Advances of buyers and the supplier’s respites constitute most of the company’s accounts payable indicating that the company’s working capital is efficiently financed by its principal business partners.
A survey of the company’s credit history revealed that OJSC TAIF-NK is meeting its liabilities regularly and in due time. Over the last years, not a single instance of the company's default on its liabilities or any arrears have been detected. As of the last reporting date, there are no liabilities in arrears in the company’s debt profile. The payment discipline of the enterprise is considered to be high.
One of the things indicating the high financial soundness of OJSC TAIF-NK is the total absence of debt liabilities constituted by credits and loans and accounts payable to other creditors. This enables the company to obtain credits and loans in financial markets effectively to implement projects in pursuance of its development program.
The company’s location in a region with appreciable primary resources and independent oil extracting facilities, as well as the availability of infrastructure providing an extensive supply and sales network for the crude materials (main pipelines for oil and oil products, railways, automobile and waterborne delivery options) also speak in favor of the company.

This press release is based on the statement of assigning a credit quality rating to OJSC TAIF-NK.
The rating score, along with any information and conclusions provided in this press release, only conveys our opinion on the Company's reliability and shall not be considered as advice on the purchase and sale of securities or the provision of loan facilities to the Company.
AK&M Rating Agency will not incur any responsibility for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.
AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993.
AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010).
AK&M Ratings are recognized by the Central Bank of Russia (for providing unsecured lending facilities – Provision 323-P), Vnesheconombank (for granting subordinated loans) and SME Bank (for its program of lending to SME businesses), RUSNANO (when selecting banks to provide business banking services to project and engineering entities implementing investment projects), the MICEX (as a prerequisite for including bonds in the Corporate Bond Index / MICEX CBI and Municipal Bond Index / MICEX MBI calculation base, for listing bonds and for providing access to the MICEX+ trading mode). Pursuant to an order of Russia's Government AK&M Ratings count for approving the capitalization increase procedure for banks. Besides, AK&M Rating Agency is recognized by AHML and accredited by SRO National Securities Market Association.

CJSC Analysis, Consulting and Marketing Rating Agency
ul. Gubkina 3
Moscow, Russia
www.akmrating.ru
Press release by: A.Y. Zolotokopov
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.
E-mail: zolotokopov@akm.ru