Investment offer Страница 1

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2 LIST OF CONTENT 1 Abstract General information about the company Rational reasonability of the development of enterprise Financing requirement The share of the company delivered to the investors Marketing plan summary Key financial indicators forecast Forecast of revenues and earnings for Forecast of revenues and earnings for Net profit forecast for Main benefits and risks of the project Main indicators of investment attractiveness of the project 10 2 Company Description History of the company Information about the owners (shareholders) of the Company Structural organization of the company Administration and management The main financial indicators for the last 5 years 15 3 Organization of the production Machine and mechanism Production assets, capacity, infrastructure Raw materials base Impact on the environment 19 4 Description of works / services Main types of works/services Purpose and scope The main characteristics The main features, benefits of customers 22 Страница 2

3 4.5. The presence or the need for licensing The degree of readiness for release and sales The need for certification, and certificates The need for and the possibility of modernization of products (works / services) Guarantee and service 24 5 Market review The general analysis of the market, works and services Market segmentation, analysis capacity, saturation, and dynamics of market segments Analysis of the competitive environment Marketing and sales strategy works and services Marketing analysis of the strengths and weaknesses of the company 27 6 Financing plan Conventions used in the construction of financial models The financing structure The results of the financial model of the project Investment Analysis Project Analysis of sensitivity and scenario analysis 32 7 The main risks analysis Characteristics of the main risks An analysis of the degree of influence on the economic efficiency of risk for different participants of the project and options to 35 minimize these risks 7.3. Conclusions and recommendations 35 8 Contact information 36 Страница 3

4 INVESTMENT OFFER 1. Abstract 1.1. General information about the Company Joint Stock Company "Mubarekneftegazmontaj" was created in accordance with the Order of the State Committee for State Property Management and Entrepreneurship Support of the Republic of Uzbekistan 639-dated from , in the form of open joint stock company. JSC "Mubarekneftegazmontaj" (hereinafter the "the Company") is a single, incomparable in Central Asia, an organization capable of providing a set of works related to the construction of main pipelines for oil, gas, oil and water supply, together with all corresponding objects of industrial and civil construction Rational reasonability of the development of the Company The Company strengthens its competitive advantage by expanding the scope of services and the introduction of new services. The Company is committed to the full and timely implementation of the commitments under the contracts. That is to prove a positive assessment of the organization, and its place among the companies in the oil and gas industry, and benefits to expand financial opportunities and the growth of confidence in the company among the "Customers." 1.3. Financing requirement The need to attract additional financial resources is a necessity for the production costs of the following main objectives: - renewal the material and technical base of the Company, including the purchase of new technology and equipments, in accordance with the Resolution of the Cabinet of Ministers form March 28, «On measures for the effective management of State Property"; - development and introduction of new technologies and equipment; Страница 4

5 - growth in the provision of works and services; - acquisition of business equipment to the tasks defined by the Decree of the President of the Republic of Uzbekistan PD-2158 "On measures of further implementation of information and communication technologies in the real economy" 1.4. The share of the company delivered to the investors JSC "Mubarekneftegazmontaj" was established in a form of a joint stock company. Today the Company s statutory fund is UZS. Statutory fund of the Company is divided into shares with a par value of 5000,0 UZS Share of the shareholder Name of the shareholder Thousand Items of shares % UZS 1 JSC Uzneftegazstroyinvest NHC Uzbekneftegaz Share of other (2) legal entity Share of individuals (1533 people) TOTAL: In accordance with Annex 1 to the Decree of the President of the Republic of Uzbekistan dated from April 28, 2015 # PD-2340 "On measures to increase the proportion of the value of private property and the economy," share of the JSC "Mubarekneftegazmontaj" is projected to be sold in the amount of 51% to strategic foreign investors. The distribution of the statutory fund of JSC "Mubarekneftegazmontaj" after the implementation of the Presidential Decree dated from April 28, 2015, # PD-2340 will appear in the following order: Страница 5

6 Share of the shareholder Name of the shareholder Thousand Items of shares % UZS 1 JSC Uzneftegazstroyinvest NHC Uzbekneftegaz Share of the foreign investors Share of other (2) legal entity Share of individuals (1533 people) TOTAL: Marketing plan summary An active marketing strategy is required in the appearance of increasing competition and the development of new segments. The marketing strategy of the company conceived taking into account expected changes in the market and is focused on strengthening the Company's position in the market, to increase the competitiveness of the estimates, the expansion of the network of services and improve the quality, renewal of the staff with attraction of the professionals and young specialists. The main objectives of the Company's marketing strategy is aimed at ensuring costeffective operation in a constantly changing environment, the competitiveness of the Company in order to meet the interests of customers, maintaining the public image, for maximum customer satisfaction in terms of volume, structure and quality of service, which creates conditions for stability of the business relationship. Страница 6

7 Besides, the Company has set a goal to increase competitiveness, which is intended to increase promotional activities, the creation of additional enterprises to provide new types of services, the organization of an effective system of control and management, the introduction of new information technologies. The implementation of the above mentioned tasks is estimated to be realistic, given sufficient support from the founder and relatively high profitability of the Company Key financial indicators forecast Forecast of revenues and earnings for Taking into consideration of development works and services for the past 5 years and taking into account strategic objectives assigned to the Company's, the total revenue in 2020 is projected at the rate of mln. UZS or 111,8% more than in And over the past 5 years and taking into account the tasks set to the Company, the total projected profits in 2020 of mln. UZS or 216,7% than in Indicators Total income (mln. UZS) including income from construction activities The total costs (mln. UZS) Direct production costs Period expenses Income from financial operations Profit before tax Income taxes and other taxes on profits Net income (mln. UZS) Страница 7

8 Forecast of investments and income for It is planned to make investments (reinvestment) in the production of the Company for 5 years in the amount of mln. UZS The average annual income to invest in the period will estimate 4.5%. Provision is further improving and intensifying investment activities will be through the following: - placement of funds from the sale of shares of JSC "Mubarekneftegazmontaj" in financial instruments large and strong domestic banks; - participation in the tender (bidding) for construction of the apart from system of NHC "Uzbekneftegaz"; - growth in scope of works and services; - enhance monitoring and analysis of the Customers, to which the company carried out works and services. Страница 8

9 Net profit forecast for The projected net profit for the will increase by 2,16 times from mln. UZS in 2014 up to million UZS in Main benefits and risks of the project Taking into view of the positive prospects of the Company's main advantages for strategic investors are: - the corporate management system ensures the greatest transparency of the Company's operations and to adequately assess the risks; - the presence of the Company's divisions in all regions of the country; - historically formed a strategic base of the Company; - the financial stability and solvency of the Company is guaranteed by the mandatory requirements of the Regulatory body and confirmed by the presence of high ranking and the highest category of issuers; - high liquidity of the shares, which creates an opportunity for shareholders to freely dispose them and leave the Company at its request; - deserved reputation and image of the Company generated among the Customers. However, the major risk factors for the project, according to the Company are as follows: Corporate risk; Risks of termination of the license; Risks related to changes in the value of the scope of work and cost of services; Risks from inflation; Social risks; Liquidity risk. To minimize and reduce the impact of the above risks the Company developed strategic and tactical decisions that exclude the occurrence of risk situations Main indicators of investment attractiveness of the project Страница 9

10 The main indicators characterizing investment attractiveness of the participation of potential investors in the capital of JSC "Mubarekneftegazmontaj" include: - the Company is considered as one of the leading construction company of JSC "Uzneftegazstroyinvest"; - long-term sustainable growth of the Company's key performance indicators; - the reputation of a stable and reliable partner for most of the large corporate and individual Customers; - organizational and legal form of the company, providing the most clearness and transparency for investors and shareholders; - credibility and high business reputation of the main shareholder of the Company JSC "Uzneftegazstroyinvest"; - the formed statutory fund of the JSC "Mubarekneftegazmontaj" in the amount of ,0 thousand UZS. The policy pursued by the company, as a priority, aimed at expanding the regional network and the scale of its activities. Страница 10

11 2. Company Description 2.1. History of the company State Enterprise "Mubarekneftegazmontaj" was established in 1993 by combining the specialized assembly companies located in the Kashkadarya and Bukhara region. According to the State Committee for State Property Management and Support of Entrepreneurship of the Republic of Uzbekistan 639 dated from , the Company transformed into Open Joint Stock Company "Mubarekneftegazmontaj." According to the Decree of the President of the Republic of Uzbekistan on August 21, 2006 PD-446 and the Order of the Cabinet of Ministers of 29 July 2007, 339, JSC "Mubarekneftegazmontaj" was designated as a structural subdivision of the JSC "Uzneftegazstroyinvest", under National Holding Company "Uzbekneftegaz". In accordance with the Law of the Republic of Uzbekistan "On joint-stock companies and protection of shareholder rights" of May 6, 2014, 370, and the decision taken at an extraordinary general meeting of shareholders on January 10, 2015 and registered by the Charter in the new edition of the name of the company was renamed to Joint Stock Company "Mubarekneftegazmontaj" («Muborakneftgazmontaj» joint-sock-company). Страница 11

12 In last 20 years, under the reform and modernization of the Company the following targeted works were carried out, which are characterized by the following steps: First, a new methodological basis, changes and additions to internal and founding documents, the development of new regulations governing labor relations, aimed at increasing the personal liability of employees and the strengthening of economic discipline were developed. There was an inventory of all the existing rules and optimization of their conditions. Second, the retraining program has been implemented, starting with senior executives and ending at the level of ordinary personnel to master modern approach of work and the market mechanisms for customer satisfaction. Thirdly, there have been gradual reform of the structure of sub structural enterprises, as the vast scope of work and services are provided by them. Fourth, a fundamentally new level of investment has been organized work aimed at the efficient use of available resources with a view to ensuring the principles of repayment, diversification and liquidity. Fifthly, measures on the expansion of services provided, as well as improving the quality of work were organized to ensure financial stability and solvency of the Company. Страница 12

13 In addition, measures were taken for the development, implementation and use of modern information technology to improve the quality of services Information about the owners (shareholders) of the Company - share of JSC "Uzneftegazstroyinvest" - 51,0%, UZS, items of share; - share of other (2) legal entity- 3,34%, UZS, items of share; - share of individuals (1553 people) - 25,49%, UZS, items of share 2.3. Structural organization of the company 2.4. Administration and management: The structure of the administration of JSC "Mubarekneftegazmontaj" Chairman of the board: Kushayev Bakhrom Boltayevich Tel: 0 (375) First deputy chairman of the board: Abdurahmanov Rashid Ahatovich. Tel: Chief accountant: Sobirov Jahongir Hazratovich Tel: Страница 13

14 Staff: Category of personnel Quantity 1 Managers Specialists Technicians 87 4 Service personnel 32 5 Production personnel Страница 14

15 Category of personnel Average salary Average salary (month) (year) 1 Managers Specialists Technicians Service personnel Production personnel Indicators WF Average number of emp. Average salary (year) WF Average number of emp. Average salary (year) WF Average number of emp. Average salary (year) total managers specialists technicians production personnel service personnel The main financial indicators for the last 5 years - the amount of net profit in 2014 is amounted to 6 428,0 mln UZS. Thereby continuing to ensure stable profitability of the Company; - in order to implement the principles of maintaining an adequate level of financial stability based on the dynamic growth of the share capital a new, methodical and methodological base of the Company relevant market competition is formed. - ensured the continuous growth of the number of enterprises of the Company for the implementation of construction activities in all regions of the country. Страница 15

16 Designation Including Gross income (mln. UZS) The scope of construction activities on its own (mln. UZS) Costs 1 sum income (tiyin) 94,7 94,5 90,9 91,2 93,0 Costs 1 sum of income from construction activities (tiyin) 96,2 93,9 91,3 91,5 93,4 Balance profit (mln. UZS) Net profit (mln. UZS) Cost-effective (%) 5,6 5,8 10,0 9,7 8 Number of total employees (people) Overall productivity per 1 employee in current prices (th. UZS) Wages Fund - total (mln. UZS) The average salary of 1 employee (th. UZS) Страница 16

17 3. Organization of the production 3.1. Machine and mechanisms Run-out Run-out Run-out Type is machine and Quantity up to up to up to mechanisms units 50% 80% 100% Machinery and equipment Vehicles Load capacity mechanisms Страница 17

18 3.2. Production assets, capacity, infrastructure The Company has an enterprise which deals with control of equipments, automation and electric works, management of the sanitary installation and technological installation, with 34 teams available for the construction and overhaul of commercial, administrative and social facilities. The need for new / additional production equipment There is a need to purchase machine tools equipped with modern technologies of production management; - Modern means of welding; - Lifting mechanisms; - Earth-moving machinery; - Means of transport; - The means to check the quality of welding; - Testing equipments; Страница 18

19 3.3. Raw materials base The Company independently is ably to procure components of material resources. Supply of precast concrete, inert materials, cement, valves, bituminous oil, roofing, bricks are received from factories located in the Republic of Uzbekistan, as well as the factories of the Company Impact on the environment The Company progresses project in accordance with the standards for maximum permissible emissions, which are developed and agreed with the State Committee for Nature Protection of the Republic of Uzbekistan. Exceeding the quota for released ingredients of technological processes is under the strict control. Страница 19

20 4. Description of works / services 4.1. Main types of works and services: The Company offers the following services and activities to customers (customers): execution of the specialized (assembly) of the construction of production, processing and transportation of oil and gas in complex with housing, socio-cultural and domestic institutions, the commissioning of production capacity of the fuel - energy complex production facilities - civil construction under turnkey contractors and other agreements in the territory of Uzbekistan and outside; installation of instrumentation, automation and commissioning of the equipment; operation of foreign economic activity; commercial activities (wholesale and retail); implementation of urban, suburban, intercity and international transportation of passengers and goods by road; production of fittings and technological units for pipelines; production of flare devices, metal and non-standard equipment for the fuel and energy complex, and objects of NHC "Uzbekneftegaz"; installation of instrumentation and fire signaling equipment, installation of equipment and automation; production of technical oxygen; production of garments, consumer goods, provision of commercial services; provision of services for the heat treatment of welded joints of pipelines; service quality control of welded joints by nondestructive method; services of lifting and transport equipment; repair service pressure vessels and process equipment; design technological units and steel structures Purpose and scope Construction is closely connected with all branches of the national economy, especially with industrial production. On the one hand, the increase in the scope of Страница 20

21 construction depends on the development of industries that provide them with the necessary tools and objects of labor (machines, materials, construction, electricity, etc.). On the another hand, performing for many sectors of the economy on the basis of construction contracts, construction companies are inextricably linked to the activities of Customers. Branches of the economy perform in relation to the construction, both as suppliers and as consumers of construction products Main characteristics At present the Company has six specialized enterprises, located in the Bukhara and Kashkadarya regions: Unitary Enterprise KIP "Montaj-servis", JSC "Mubarekneftegazmontaj" (Amirabad v., district Kagan, Bukhara region), the main activity - installation of instrumentation, automation and commissioning of equipment at the facilities capital construction, repair and reconstruction, installation of technological pipelines; "Mubarekneftegazmontazhspetsstroy"LLC, JSC "Mubarekneftegazmontaj" (Mubarek city, Kashkadarya region), the main activity - assembling, tying the linear part of oil and gas pipelines, compressor stations, plants for oil and gas; Unitary Enterprise "Karaul-Bazar Mahsusmontaj", JSC "Mubarekneftegazmontaj" (Karaul Bazar city, Bukhara region), the main activity - construction and installation of ventilation systems, gasification of settlements; Unitary Enterprise "Neftegazuskunamontaj", JSC "Mubarekneftegazmontaj" (Karaul Bazar city, Bukhara region), the main activity - the installation of surface and underground facilities at oil and gas facilities, installation of technological equipment and pipelines, compressor stations, oil refineries and gas, oil and other objects gas industry. Unitary Enterprise "Trubodetal", JSC "Mubarekneftegazmontaj" (Amirabad v., district Kagan, Bukhara region) - industrial enterprise, the main activity of which is the enlarged assembly units and production of pipeline fittings, metal, supports for technological lines, ensuring the construction of oil and gas lifting mechanisms. Страница 21

22 Production of technical oxygen; providing special vehicles for transportation of pipes, installation of equipment, metal products and other goods, as well as human resources to construction sites and oil and gas facilities in accordance with the Decree of the President and the Cabinet of Ministers under the Localization programme. (localize the production of import-substituting products) The main features, benefits of customers The main features characterizing the quality of services provided by JSC "Mubarekneftegazmontaj" include: - high professional level of main personnel, both in terms of quality of the work and enter into contracts with customers; - the affordability of works and services of the Company, through the standardization of contract terms of service The presence or the need for licensing Страница 22

23 4.6. The degree of readiness for release and sales JSC "Mubarekneftegazmontaj"is a fully operational, with the presence of all the legal, human, material, technical, technological and methodological components for the full implementation of works and services. The executive board of the Company has a department working with customers (clients) which, if necessary, can in the shortest time to develop and introduce new kinds of production equipment and technology in the service sector. JSC "Mubarekneftegazmontaj" has the following licenses: License AA 134 dated from , the construction and repair of main gas pipelines, oil pipelines, oil pipelines, issued by the Cabinet of Ministers of the Republic of Uzbekistan; License 1473 from , the implementation of the construction of extremely dangerous objects and objects of a high risk, issued by the Cabinet of Ministers The need for certification, and certificates Страница 23

24 4.8. The need for and the possibility of modernization of products (works / services) The possibility of modernization of products applicable to works and services exclusively in terms of the renegotiation of contracts of works and services as agreed with customers (clients). Exception is the contracts of works and services which are set by law. In some cases, the revision of the contracts terms requires a change in the previously deposited to the regulatory authority model rules for works and services Guarantee and service JSC "Mubarekneftegazmontaj" guarantee its customers (clients) to provide works and services in accordance with the laws and treaty provisions. Compliance with the requirements of solvency, established by the legislation, is carried out by maintaining the relevant standards within the established parameters for which information is provided on a quarterly basis to the regulatory body. Страница 24

25 5. Market review 5.1. The general analysis of the market, works and services In previous years, the management of construction - installation work, the Company was focused on central funding, and the objects have been included in the address program of construction of oil and gas industry of Uzbekistan. The customer must timely approve the cost estimates, which clearly justified the strategy of the project and its cost-effectiveness and assure on time funding for the phased purchase of construction materials and equipment, payment of salary and other compensation for production costs of contractor. Along with the implementation of already signed contracts for 2015 for the construction of roads and reconstruction works for the industry objects, the Company is seeking the ability to perform work and services to customers and offer third-party services to the public in the form of consumer goods Market segmentation, analysis capacity, saturation, and dynamics of market segments Further development of the provision of works and services in the field of construction work is connected primarily, to an increase in the scope of services to both domestic and foreign enterprises, through the introduction of new techniques and technologies, the expansion of infrastructure services, including increasing the number of experts, etc. as well as advocacy work in all regions of the country in order to promote the benefits provided works and services Analysis of competitive environment JSC "Mubarekneftegazmontaj" provides service works mainly for for enterprises of JSC "Uzneftegazstroyinvest" in the construction and repair of industrial and social facilities, construction of access roads and platforms to wells and compression stations foundations. Страница 25

26 5.4. Marketing and sales strategy works and services The main point of dissemination of works and services is traditionally own advertising display. Despite the introduction of web sites and other means of advertising the sales indictors of JSC "Mubarekneftegazmontaj" and other companies s remains very low. The implementation of the main scope work and services performed by legal entities of the Company. In the face of increasing competition, maintaining the strong position of JSC "Mubarekneftegazmontaj" in the market, as well as the development of new segments requires an active marketing strategy development. The marketing strategy of the company conceived taking into account expected changes in the market and is focused on strengthening the Company's position in the market, to enhance the competitiveness of budget and rate, expansion of sub structural organizations and to improve the quality of services, the completion of the Company's professional personnel and attraction of young workers. The main objectives of the Company's marketing strategy is aimed at ensuring costeffective operation in a constantly changing environment, the competitiveness of the company in order to meet the interests of customers, maintaining the public image, the maximum satisfaction of the customer (client) in scope, structure and quality of service, which creates conditions for sustainable business relationship. Besides, the Company has set a goal to increase competitiveness, which is intended to increase promotional activities, the creation of additional operational units for customer service, the organization of an effective system of control, the introduction of new methods of work and information technology. The realization of the set tasks ad objectives is estimated quite realistic, given sufficient support from the founders and relatively high profitability of the company. Страница 26

27 5.5. Marketing analysis of the strengths and weaknesses of the company Taking in to account, that it is increasing the planned construction of residential houses on mortgage lending in 2015 in the Republic, it is necessary to determine the form of financing the construction of residential buildings and the need for funding. From the customer must be timely approvals and cost estimates, which clearly justified the strategy of the project and its cost-effectiveness and timely funding for the phased purchase of construction materials and equipment, payment of salary and other compensation for production costs of contractor. Along with the implementation of already signed contracts for 2015 for the construction of roads and overhaul for the industry the Company is seeking the ability to perform work and services to customers and third-party services to the public in the form of consumer goods. Customer must timely approve and cost estimate, which clearly justify the strategy of the project and its cost-effectiveness and assure on time funding for the phased purchase of construction materials and equipment, payment of salary and other compensation for production costs of contractor. Along with the implementation of already signed contracts for 2015 for the construction of roads and reconstruction works for the industry objects, the Company is seeking the ability to perform work and services to customers and offer third-party services to the public in the form of consumer goods. Competitive advantages Presence of one of the biggest regional base of materials and sub structural organizations Qualified specialists in key positions of production section and management board Well developed and productive methods of work and services. Experience in the filed construction works and services in Uzbekistan. Wide range of services provided. High level of reliability and financial stability Competitive deficiency Low level of material base in regional sub structural organizations Lack of qualified specialists in sub structural organizations of the company and fluctuation movement of personnel Lack of working and service experience in international market. Decreasing liquidity of investments Страница 27

28 Individuality of provided works and service Long-term partnership Customer base Introduction of IT in function of the Company Capabilities Low level of foreign company operational in the market Increase in the level of average salary and standards of living in the country High demand for Company service due to active loans for vehicles by the government Risks Risk of functioning many foreign companies in the domestic market Increased inflation (growth in prices) Customer loose due to competitive environment Страница 28

29 6. Financing plan Indicators Investments requirement Forecast of production of goods Items of measurement mln. USD mln. USD Development plan for , , , , , , , , , , , , The prepositions used in the construction of financial models A number of indicators and the factors influencing the result, based on market conditions, expected demand, the expected price of services, the agreements reached with key customers (clients), planned marketing activities, etc, are used when constructing a financial model. The following groups of indicators are considered: - personnel (the need for personnel, labor costs, operation); - financial (need for financing sources and terms of attracting investment); - tax (tax rates and fees payable to the budgets of all levels); - marketing (cost of contracts and the forecast price changes); - investment (purchased equipment, purchase of equipment, capital costs for the construction of buildings and structures) and others. It takes into account the operating costs associated with the general economic activity of the Company, including the cost of depreciation and taxes. Operating expenses include: - variables (outsourcing); - overhead (salaries, maintenance costs of equipment and buildings and other fixed costs); - sales related to the implementation and promotion of insurance services; - administrative. The sources of attraction of investments, amounts and periods of attracting and refund are taken into account. Страница 29

30 Calculation is carried out operating profit, profit before tax, income taxes and net income. The information on the company in the corresponding period in the context of profitability and efficiency of operations, financial and property status of the company is analyzed Financing structure of the Company The financial resources of the company consist of a combination of its own funds and receivables from the outside, at the disposal of the company and designed to meet its financial obligations and finance of its current expenses. The availability of financial resources in the amounts required, as well as their effective use determines the financial strength of the company, the financial stability and solvency. The main source of financing is its own resources. Own funds of the Company formed by the internal (that profits remaining at the disposal of the company, depreciation) and external sources (this means additional contributions to the statutory fund, additional issue and sale of shares, other external sources of formation of own financial resources). Profit - is the main source of funds of the dynamically developing company. In the balance sheet it is: 1) explicit - as retained earnings; 2) in a veiled form - both created at the expense of profit funds and reserves. The amount of profit depends on many factors. The main factor among which is the ratio of income and expenses. Profit - is the main source of reserve capital (fund), which is intended to compensate for unexpected losses and potential losses of economic activity. The order of formation of the reserve capital is fixed in the regulations that govern the activities of the company as well as its statutes. Страница 30

31 6.3. The results of the financial model of the project Indicators Total profit Total expense Net profit The planned amount of profit of the Company can be adjusted as a result of: - increase of the statutory fund; - conservation refinancing rate; - maintaining the level of payments. The presented figures are current as of the date of submission. The probability of matching the results and the projected parameters will depend on the possible increase in the statutory fund of the Company, market conditions and changes in the current legislation. Therefore, the Company set the goal of expanding and profitability are modified. The actual development of the Company will follow the planned parameters Investment Analysis of the Project In recent years, a policy aimed at expanding the regional network is regarded as a priority for the Company. Since its inception, the Company is actively involved in shaping the development of the services market in the country and systematically expanding its activities. Progress indicators provide the financial stability and solvency of the Company at a high level. For the last 4 years the Company's solvency ratio exceeds the State Inspectorate of the Republic of Uzbekistan in the standard of times, and has a positive dynamics. It is certainly serves as a guarantee of the Companies performance assumed commitments to customers, partners and shareholders. Also, the guarantee reserves formed from profit provides the guarantee of the Company of obligations to partners and dynamic improvement in operating performance and its sub structural Страница 31

32 organizations. Finally, this assessment helps to expand financial opportunities and the growth of trust to the company among customers. In accordance with the planned business plan for years , estimates of the profitability of the authorized capital, return on assets and earnings per share are as follows: Indicators Profitability of the statutory stock (%) 8,04 9,26 10,35 11,47 12,62 Profit per share (UZS) Analysis of sensitivity and scenario analysis During the business planning a sensitivity analysis is conducted, that is, the effect of changing the initial parameters of its final results is evaluated. The method of sensitivity analysis is to change the selected parameters within certain limits, provided that the other parameters remain unchanged. Through sensitivity analysis the resulting indicators for different values of given variables required for calculation can be evaluated. This type of analysis can help to determine the most critical variables that have the greatest affect on the feasibility and effectiveness of the business plan. As a fluctuating initials the following variables were taken: - volume of income; - expenses; - operating expenses or their components; -level of inflation;; - forming of reserves, etc. As the resulting indicators the following units were used: 1. Performance Indicators - index of profitability; - payback period; - cost-effective investments; 2. Annual figures Страница 32

33 - the balance sheet profit; - net profit; - surplus accumulated of real money. Absolute sensitivity analysis can help to determine the numerical deviation of resulting indicators under changing the values of the original variables. Scenario analysis of the project allows to evaluate the impact on the business plan for the possible simultaneous change of several variables by the probability of each scenario. Страница 33

34 7. The main risks analysis 7.1. Characteristics of main risks Corporate Risks This category of risk associated with the probability of deterioration in the financial condition of the Company because of adverse changes that may occur because of its activities, as well as affiliated organizations. The company has all the possibilities of direct influence on the probability of occurrence of these adverse changes, as well as possible to reduce the possible negative impact on its financial condition as a result of these changes. Risks of termination of license To date, the Company has a license for their activities. Licenses with specific deadlines. Activating in accordance with a license without violating licensing rules and regulations, the timely submission of reports to the relevant authorities allow the public to minimize these risks. Risks associated with changes in the value of the market and the cost of services This risk is generated by the results of the Company's operations, and causes the reduction of the amount of its profits. The causes of such risk may result from: reduction of potential of services, decline in demand for services and reduction of the Company's revenue in the form of income in terms of increasing competition and a number of other similar factors. As a result, the Company s financial condition could be at risk in decrease of dividends. These risks are assessed as moderate by the Company. Risks from inflation, devaluation and bank interest rates The Company is exposed to inflation risk because of its place surplus funds on a bank account. Currency risk That type of risk are considered as insignificant. Страница 34

35 7.2. An analysis of the degree of influence on the economic efficiency of risk for different participants of the project and options to minimize these risks In order to minimize and reduce the impact of the above mentioned risks, the Company has developed a tactical decision to exclude the occurrence of risk situations. The Company can take the decision of denying the specific risks, both at the stage of preparation of the solution, and by refraining from activities in which the company is already involved if the actual risk of higher than expected. Also, the Company focuses on the following in order to minimize the risks: 1. Adoption of the risk - management decision to accept some (existing or planned) level of risk, without taking measures to reduce it, usually for technical or cost reasons. In case the risk of the need to take into account possible losses - the loss of a permanent nature, which can be easily foreseen; - Losses caused by the single, static risk. Typically, these risks are associated with substantial losses. The peculiarity of the fact that they do not lend themselves to statistical evaluation. 2. Reduction potential losses by prediction, and using more complete use of the available knowledge in the field Conclusions and recommendations Taking into account the positive prospects of the Company, the main advantages for strategic investors are: - the presence of the corporate management system, ensures the greatest transparency in the activities of the Company and assess the risks adequately; - factually established customer base of the Company; -Financial stability and solvency of the Company guaranteed by the mandatory requirements of the regulatory body confirmed the presence of high ranking; - high liquidity of the shares, which creates an opportunity for shareholders to freely dispose of them and leave the Company at its request; - earned reputation and image of the Company generated among customers. *Note: Tabular data and the data in the diagrams are presented according to the consolidated financial reporting. As well as overall data on staff takes in to account staff of the structural units of the company. Страница 35

36 8. Applications Contact information - Mailing adress: , Republic of Uzbekistan, Kashkadarya region, Mubarek city, 2-nd microrion/ - Means of communication: tel: (0375) , fax: (0375) smkmngm@mail.ru - - Codes of the company: - OKPO (General Classification of Enterprises and Organizations): IIN (Tax identification Number): SOATO (Indications System for Administrative-Territorial Formations),: OKONKh (General Classifier of Economy Branches): SOOGU (Government designation system) FS (Federal Assembly) OPF (Legal form of Organization) Bank details: Mubarek branch of joint-stock commercial bank Uzpromstroybank - O\A , МFO Additional materials - A copy of the registration certificate; - Copy of the charter; - A copy of the license; - Scheme of the structure; - Driving the governance structure; - Main manager s resume; - Company photo. Страница 36

37 Kushayev Bakhrom Boltayevich Starting from April 30, 2010: Chairman of the board of JSC Mubarekneftegazmontaj Date of birth: Place of birth: Bukhara region, Gijduvan district Nationality: Party member: Uzbek N\A Education: Graduated from: Higher 1992, Bukhara institute of food and consumer industry Specialty: mechanical engineering Knowledge of foreign languages: Russian WORK EXPERIENCE army service mechanic at 5 th construction-installation department of JSC Bukharagazpromstroy depot officer at 5 th construction-installation department of JSC Bukharagazpromstroy head of the material and technical supply department at JSC Mubarekneftegazmontaj first deputy Chairman of the board of JSC Neftegazkurilish director at 8 th representative office of JSC Mubarekneftegazmontaj head of the material and technical supply department at JSC Mubarekneftegazmontaj director of Neftegazinginiring LLC director of UE Neftegazuskunamontaj of JSC Mubarekneftegazmontaj 2010 й. - present - Chairman of the board of JSC Mubarekneftegazmontaj Страница 37

38 Abdurakhmanov RAsgid Ahadovich Starting from July 17, 2011: Acting first deputy Chairman of the board of JSC Mubarekneftegazmontaj Date of birth: Place of birth: Kashkadarya region, Guzor district Nationality: Party member: Uzbek N\A Education: Graduated from: Higher 1989, Tashkent Polytechnic Institute Specialty: industrial and civil construction Knowledge of foreign languages: Russian WORK EXPERIENCE worker at Dustlik farm in Guzar dictrict worker at 3 rd representative office of UE Shurtanneftgaz chief engineer, site manager, master at 3 rd representative office of Uzbeksanoatkurilish company, in Bukhara city йй. head of the construction and reconstruction department, site manager, at UE Shurtanneftgaz site manager at UE Neftgazuskunamontaj of JSC Mubarekneftegazmontaj director of the UE Muborakmontaj of JSC Mubarekneftegazmontaj present. - acting first deputy Chairman of the board of JSC Mubarekneftegazmontaj Страница 38

39 Adizov Dilmurod Tuymuradovich Starting from November 1, 2013: Acting deputy Chairman of the board of JSC Mubarekneftegazmontaj on construction production Date of birth: Place of birth: Bukhara region, Kogon city Nationality: Party member: Uzbek N\A Education: Graduated from: Higher 1995, Bukhara institute of food and consumer industry Specialty: industrial and civil construction Knowledge of foreign languages: Russian WORK EXPERIENCE student at Bukhara institute of food and consumer industry chief engineer, head of the production department at 9 th representative office of JSC Mubarekneftegazmontaj director of UE Trubodetal, JSC Mubarekneftegazmontaj acting chief manager and deputy chairman of the board of JSC Mubarekneftegazmontaj 2013 й. - present - Acting deputy Chairman of the board of JSC Mubarekneftegazmontaj on construction production Страница 39

40 Makhmudov Akhmad Uktamovich Starting from May 20, 2013: Deputy Chairman of the board of JSC Mubarekneftegazmontaj on financial issues Date of birth: Place of birth: Bukhara region, Bukhara city Nationality: Party member: Uzbek N\A Education: Graduated from: Higher 2002, Bukhara State university Specialty: economist Knowledge of foreign languages: Russian WORK EXPERIENCE broker at Buhoro-FB LLC, in Bukhara city leading specialist at Titan LLC, in Bukhara city director of the RAU Invest LLC, in Bukhara city head of the corporate management and financial credit documents department of JSC Mubarekneftegazmontaj acting deputy Chairman of the board of JSC Mubarekneftegazmontaj on financial issues present - deputy Chairman of the board of JSC Mubarekneftegazmontaj on financial issues Страница 40