Annual report 2010

JSC IDGC Holding. Annual Report 201021.2. Financial Management21.2.1. Financial Management of JSC IDGC HoldingThe Company’s financial management employsthe following methods and techniques: forecastingand planning, financing, regulation andauthorization of financing activities, financialsettlement supervision, etc.The Company’s financial management appliesdirectly to cash flow and financial resources(internal and borrowed funds). JSC IDGC Holdingdid not borrow in 2010.achieving the maximum effectiveness of financialinvestments with the optimized risk to returnratio. The maximum return on financial investmentswas attained through depositing temporarilyavailable funds in Russia’s largest financial andcredit institutions, which have a high level of reliability,at the highest possible interest rates(market-average or above).JSC IDGC Holding’s management of temporarilyavailable funds was based on the principle ofAssets of JSC IDGC HoldingThe book value of the Company’s assets as ofDecember 31, 2010, is assessed at RUB 199.3 billion.Since January 1, 2010, the asset value hasgrown by RUB 56.3 billion (by 39%). Net assetvalue was RUB 191 billion.Long-term financial investment is the highestpercentage of the Company’s total assets(91.3%). Fixed assets and construction-inprogressaccount for 0.87%; total accountsreceivable, 3.46%; cash and short-term financialinvestment, 4.24%.Changes in the structure of noncurrent assets versus2009 are characterized by the grown percentageof long-term financial investments (0.8%) andminor growth of the percentage of fixed assets andconstruction-in-progress (0.32%). As of the fiscalyear end, the value of long-term financial investmentsgrew by RUB 52.5 billion (40.6%) to RUB181.9 billion. They include investment in theauthorized capitals of organizations and contributionsunder partnership agreements. The year-endsum of fixed assets and construction-in-progressgrew by RUB 27.4 million. The value of fixed assetsgrew by RUB 19.6 million and construction-inprogressincreased by RUB 7.8 million.In 2010, the structure of current assets was characterizedby changes in the percentage of cashand short-term financial investments in currentassets (54%). Absolutely liquid assets of theCompany in the fiscal period were RUB 8.45 billion.Accounts receivable as a percentage in theworking capital decreased by 32 percentagepoints. The aggregate accounts receivable ofcompanies decreased by RUB 2,125 million, or23.6%, whereas long-term accounts receivablegrew by RUB 765 million and short-term accountsreceivable during the year decreased by RUB 2,890million. A decrease in short-term accounts receivablewas caused by the redemption of non-interest-bearingnote of MOESK worth RUB 2.25 billion.In the fiscal year, the share of inventories incurrent assets grew by 70.4% to 0.4%. The percentageof Value Added Tax on purchased assetschanged slightly from 2.14% to 1.63%.202