R.A.B.C. rating scale
R.A.B.C. provides various types of rating examinations. The most spread of them are competitiveness examinations (estimation of a level of competitiveness of a separate company with taking into account temporal tendencies). Additionally, R.A.B.C. rates other aspects of a production activity of a company and provides conclusions concerning performance of industrial enterprises.
The Agency prepares following types of independent examinations:
Rating of competitiveness of construction industry is conducted by means of contact and/or distant evaluation including consideration on a specific direction of activity (engineering and site survey, construction and architecture planning, construction, and other conterminal activities). In distant evaluation a maximum value of rating mark that can be achieved is restrained to ‘B1’ because of incompleteness of information package. Results of evaluations are presented on R.A.B.C. website and can be acquired by means of purchase of an extract. A contact rating of competitiveness is characterized by high level of information certainty and objectivity and a maximum rating value reaches ‘A1’.
Ratings of reliability and information openness are conducted with respect to developers and self-regulatory organizations of construction industry. Capacity of analysis is determined by methods of information processing and gathering i.e. with the use of only open sources of information or with the involvement of internal documentation of companies and their explicit auditing, numerically or by experts’ professional assessments. Companies are allowed to affects their actual level of appraisal by providing extra information and therefore reducing level of information uncertainty.
Companies are categorized according to adopted rating scale.
Rating scale and its categories present an ordered array consisting of elements with double literal-numeric designation.
Rating scale is implemented for each group of subjects. In process of time, particular subjects can leap across categories according to their renewed rating marks.
Basic rating scale of the R.A.B.C. Agency consists of the following categories:
A(A1,A2,A3) Excellent competitive ability
A – Group of companies that possess excellent (very high) competitive ability.
B(B1,B2,B3) Good competitive ability
B – Group of companies which possess good (high) competitive ability.
C(C1,C2,C3) Allowable competitive ability
C - Group of companies which possess satisfactory (allowable) competitive ability.
D(D1,D2,D3) Low competitive ability
D – Group of companies which possess low (insufficient) competitive ability.
E – Group of companies which have declared of insolvency or are in a process of bankruptcy
E – Partial of full insolvency of a company.
U Group of companies which cannot be evaluated because of the lack of reliable information
U – Rating cannot be assigned (Unknown) because of the limited amount of available information about a company.
For detailed description of the R.A.B.C. rating scale please visit ‘About R.A.B.C./Documents’ section
Evaluation of construction companies
Rating marks assigned to companies of construction sector are formed by means of analysis of the adopted set of internal and external operation parameters. Each type of rating evaluation involves consideration of its own set of parameters. An ultimate mark is a sum of score points achieved on any parameter.
A double literal-numeric mark is assigned to a subject under evaluation. Possible values of rating marks lay in the range between ‘A1’ (‘B1’ for distant examination) and ‘D3’ where ‘A1’ is the highest mark and ‘D3’ is the lowest one. A company is attributed to ‘E’ category in case if a bankruptcy procedure has been officially initiated against it and chances of its return of a state of normal competitive operation are extremely low.
Within the framework of rating categories A, B, C and D, in addition to a letter the Agency adds a numeric modifier 1, 2 or 3. Modifier 1 indicates that a company is arranged in a top segment of its rating category and has a potential for upgrading. Modifier 2 shows a disposition of a company in a middle part of its range and states its stable status inside a group. Eventually, modifier 3 shows that an organization is placed in a lower part of its group and possesses a risk for downgrading.
Scale of evaluation of companies’ competitiveness level
Competitiveness is a characteristic of a company which describes a level of actual or potential satisfaction of its clients compared to other parallel organizations available on same market. Competitiveness defines a power to withstand a competition with other subjects of the market and indirectly describes its efficiency and productivity.
Results of rating evaluation allow diagnosing critical condition of a company and avoid risk of bankruptcy.
|Level of competitive ability of a company
|‘A’ is a category which involves companies with excellent (very high) competitive ability.
|Rating marks of group ‘A’ denote very high level of competitive ability of a company and consequently low risk of its failure. Marks of this kind are assigned only in case of exclusively high ability of a company to fulfill its obligations on a specific direction of activity. Probability of negative influences on this ability by predictable circumstances is not substantial.
|‘B’ is a category which includes companies with good (high) competitive ability.
|Rating marks of group ‘B’ denote low expectations of company’s disability and consequently high level s of its competitiveness. Ability to fulfill obligations on specified directions of activity of such companies is estimated to be high. However this ability undergoes more risks of influence of negative factors of business environment and economic accidents compared to companies of group ‘A’.
|‘C’ is a category including companies which possess satisfactory competitive ability.
|Rating marks of group ‘C’ designate comparatively low expectations of disability of a company at given moment and consequently acceptable levels of its competitiveness. Ability to fulfill obligations on specified directions of activity of such companies is estimated as satisfactory. However influence of negative factors of business environment and economic conditions are very likely to shrink such ability. At the same time flexible business management and production and financial discipline endorse capacity to fulfill obligations.
|‘D’ is a category of companies which possess low competitive ability.
|Rating marks of group ‘D’ designate presence of substantial risks of disability of a company and consequently reduced levels of its competitiveness. A degree of their reliability is limited. Obligations are currently fulfilled however ability to proceed fulfilling is vulnerable and might be at risk in case of negative factors of business environment or economic accidents.
|‘E’ – a state of a partial or complete default of a company
|‘E’ – a state of a partial or complete default of a company established for organizations which have been previously rated and a severe shrinking of their capacity is expected or already occurred and a bankruptcy procedure has been initiated against a company.
|‘U’ – a rating mark cannot be assigned to a company because of restrained amount of information about it and therefore Unknown real level of its efficiency and productivity.
For detailed description of gradation of competitiveness ratings (levels and sublevels) please read:
‘Specification of competitiveness ratings and structure of rating scales for evaluation of companies of construction sector’Скачать
Gradation of levels of information openness of developers
Rating of information openness of developers is based on analysis of publicly available information related to developers operation. It takes into account not only compliance to legislative norms but also availability of information about a company and its objects under construction for visitors of company’s websites and other public sources of information.
All developers are evaluated by more than 20 parameters in the following directions:
- Project Declaration, other approvals;
- Licenses and admissions;
- Construction reports;
- Financial stability.
Accordingly to this evaluation all companies are ranked by each parameter and score points are assigned in compliance with rankings made. Then all score points are summed and a correlation between R.A.B.C. rating scale and total score points is conducted. Eventually, a rating mark is assigned in the interval between the highest mark ‘A1’ and the lowest one ‘C3’.
|Gradation of levels of information openness of developers
|‘A’ – a group of companies with excellent (very high) level of information openness (transparency).
|Rating category ‘A’ includes companies demonstrating the highest level of information openness (transparency). It implies that companies not only disclose all mandatory information in accordance with Russian Federal law ‘214-FZ’ but also reveal complementary data such as financial statements and accounting etc. which allow appraising a level of companies’ trustworthiness. All information is presented in a convenient and a clear way and a search does not require substantial temporal costs and labor efforts. A regular update of content on web-site occurs involving publishing actual news and photographs describing a process of construction as well as prices and descriptions of an object.
|‘B’ – a group of companies exhibiting a good level of transparency.
|Rating category ‘B’ includes companies demonstrating a high level of information openness (transparency). It implies disclosing of all mandatory documents in accordance with Russian Federal law ‘214-FZ’ as well as revealing a part of information related to a company and its projects. This allows investors and interest holders evaluating a level of trustworthiness of a company. Information is presented in a convenient and a clear way and a search does not require substantial temporal costs and labor efforts.
|‘C’ – a group of companies exhibiting satisfactory (acceptable) level of information openness.
|Rating mark ‘B’ is assigned to companies exhibiting satisfactory levels of information openness (transparency). It implies disclosing of only all mandatory information in accordance with Russian Federal law ‘214-FZ’ in an irreducible amount. Search for information on company’s official website may be seriously obscured and take substantial efforts and temporal costs.
|‘D’ – a category of companies exhibiting low level of information openness.
|Rating category ‘D’ includes companies which demonstrate the least possible information transparency on the market. Rating marks of this type are assigned in case of absence of information about a company or its objects under construction in an open access.
|‘E’ – indicates a partial of complete default of developer or a company is under liquidation.
R.A.B.C. gradation of developers’ reliability levels
This kind of rating evaluation is aimed to help customers in making a good choice of reliable developers and avoiding making deals with unscrupulous participants of the market.
Following criteria are taken into account:
- Information openness (transparency);
- Human resources;
- Business reputation;
- Financial stability.
|R.A.B.C. gradation of developers’ reliability levels
|‘A’ – a category of companies demonstrating excellent (very high) reliability.
|Rating marks of category ‘A’ denote very low probability of a failure of a company in fulfilling its obligations and consequently high levels of its reliability. Rating marks of this kind are assigned only in case of extraordinarily high business management standards and strong capacity of a firm to meet investors’ and interest holders’ demands. A probability of successful completion of objects under construction is very high and all statutory requirements according to Russian Federal law ’214-FZ’ of December 30, 2004 are met. Chances of negative influences of by all predictable circumstances on such companies are not substantial.
|‘B’ – a category of companies demonstrating high reliability.
|Rating marks of category ‘B’ denote low expectations of incapacity of a company and consequently high level of its reliability. Capacity to fulfill obligations of such companies is valued as high. However this capacity might experience more risks of negative influences of business environment and economic conditions than companies of group ‘A’.
|‘C’ – a category of companies demonstrating satisfactory reliability.
|Rating marks of category ‘C’ denote comparatively low current expectations of disability of a company and consequently satisfactory levels of its reliability. Capacity to fulfill taken obligations is estimated as satisfactory. However influence of negative business environment and economic conditions is likely to diminish this capacity.
|‘D’ – a category of companies which exhibit low reliability.
|Rating marks of category ‘D’ imply presence of substantial risks of disability of a company and consequently its depressed reliability levels. Margin of safety of such companies is short. Taken obligations are currently fulfilled however an ability to continue fulfilling obligations is estimated to be vulnerable even in case of a minor deterioration of macroeconomic environment.
|‘E’ – a particular of complete default of a company is declared in case of a severe decline in capacity of a firm to fulfill its obligations or a procedure of bankruptcy initiated against it.
|‘U’ (Unknown) – a rating mark cannot be assigned because of insufficient amount of data.
Scale of reliability rating of Self-Regulatory Organizations (SRO) on construction industry
Non-profit partnerships which have taken over a part of control functions in a sphere of regulation of construction companies’ activity require independent and professional assessments of quality of their performance. Reliance of customers on a company can and should be sustained and confirmed by experts’ analysis determining a level of reliability of participants of certain SRO’s.
|Scale of reliability rating of Self-Regulatory Organizations (SRO) on construction industry
|‘A’ – a category of SRO’s exhibiting excellent (very high) reliability
|According to R.A.B.C. analysis, these self-regulatory organizations (SRO’s) fully meet legislative norms and requirements. A partnership is characterized by high level of responsibility for its actions and performance of its members which is expressed in high average rating point assigned to participants of such SRO’s. Partnerships’ mechanisms demonstrate high efficiency in protecting and serving interests of their companies as well as in developing internal standards and principles of operation of SRO’s.
|‘B’ – a category of SRO’s exhibiting high reliability.
|According to the Agency’s opinion, these self-regulatory organizations fully meet legislative norms and requirements. They show high level of responsibility for its actions and performance of its members which is expressed in a good average rating point of partnerships’ members. Mechanisms of operations demonstrate suitable efficiency.
|‘C’ – a category of SRO’S demonstrating average reliability.
|According to R.A.B.C. opinion, these self-regulatory organizations fully meet legislative norms and requirements. A significant part of their members possesses satisfactory level of competitive ability or belongs to a category of non-transparent organizations. Mechanisms of operation of these SRO’s shows satisfactory efficiency. A control over actions of partnerships’ members is executed however it is insufficient.
|‘D’ – category of SRO’s possessing low reliability.
|These self-regulatory organizations of construction industry do not meet all legislative norms and requirements in an ultimate manner. They are characterized by a large number of non-competitive or non-transparent companies.
|‘E’ – SRO is in a process of liquidation.
|‘U’ (Unknown) – rating mark cannot be assigned because of not sufficient amount of information related to a SRO.
Rating of a company represents a separate estimation of its level of competitive ability conducted on specific directions of activity with taking into account long-term tendencies.
Rating mark is an opinion of the Agency presented as an attributing a company to a certain category according to adopted scale.
The R.A.B.C. conducts various types of rating assessments. The most spread of them are competitiveness ratings. The Agency also assigns rating marks or production activity of companies and provides advises concerning relative validity of industrial corporations.
Encyclopedia of ratings (A. M. Karminsky, A. A. Polozov, S. P. Ermakov) [12/08/2013] Download