RESOLUTION OF THE STATE COMMITTEE OF THE REPUBLIC OF UZBEKISTAN ON MANAGEMENT OF THE STATE-OWNED PROPERTY

of June 14, 2006 No. 01/19-23

About approval of the National standard of the Republic of Uzbekistan of assessment of property "Assessment for loans security, mortgages and debt obligations"

According to the Law of the Republic of Uzbekistan "About estimative activities", the resolution of the President of the Republic of Uzbekistan of April 26, 2006 NPP-335 "About Measures for Enhancement of Activities of the State Property Committee of the Republic of Uzbekistan" and the resolution of the Cabinet of Ministers of the Republic of Uzbekistan of May 8, 2003 the State committee of the Republic of Uzbekistan on management of state-owned property decides N210 "About Licensing of Estimative Activities":

1. Approve the National standard of the Republic of Uzbekistan of property assessment "Assessment for loans security, mortgages and debt obligations" according to appendix.

2. This resolution becomes effective after ten days from the moment of its state registration in the Ministry of Justice of the Republic of Uzbekistan.

Approved by the resolution of the State committee of the Republic of Uzbekistan on management of state-owned property of June 14, 2006 No. 01/19-23

National standard of the Republic of Uzbekistan of property assessment (NSOI 5). "Assessment for loans security, mortgages and debt obligations"

This National standard of assessment of property "Assessment for loans security, mortgages and debt obligations" (NSOI N5) is developed on the basis of the Law of the Republic of Uzbekistan "About estimative activities" and is element of normative regulation of estimative activities in the Republic of Uzbekistan.

1. Introduction

Purpose of NSOI N5 - to determine differences of estimates for loans security, mortgages and debt obligations from the estimates for the financial reporting which are carried out according to NSOI N4. NSOI N5 establishes framework in which the Appraiser can carry out property assessment on the instructions of the credit institutes and other organizations providing financing on security the specific fixed assets unlike the crediting of physical persons and companies based on trust. Consultations of the Appraiser can extend to other areas, however NSOI N5 belongs only to property assessment for loans security, mortgages and debt obligations.

Many agreements on financing are provided with specific assets. The concept of the providing accepted according to the loan, the mortgage or other debt obligation can be determined more widely. In certain cases pledge of equity of the company without consideration of specific assets can act as providing. As a rule, in case of assessment of specific assets as ensuring financing the Appraiser deals with market value. Sometimes, depending on circumstances, provisions of the legislation and requirements of the party accepting property as providing, the Appraiser can consider the cost of operating plant, salvage value or other cost types, however market value interests those who provide financing, as a rule.

Though objects of property differ on their location, usefulness, age, degree of suitability and other factors, the basic principles of assessment remain invariable. It is important that Appraisers consistently applied valuation principles within coverage of NSOI N5, carrying out the objective assessment clear and the users meeting requirements.

2. Scope of application

NSOI N5 is applicable in all situations in which from Appraisers it is required to give consultations or to submit the report to credit institute or other suppliers of the loan capital when the purposes of assessment are connected with loans, mortgages or debt obligations. NSOI N5 should be considered as the NSOI N2 expansion.

3. Determinations

The market value determined at NSOI N2, remains that base on which the Appraiser builds the work. It is determined as follows: market value is settlement sum of money for which exchange of asset for date of assessment between the interested buyer and the interested seller as a result of the commercial transaction after carrying out proper marketing in case of which each of the parties would be effective would take place, being knowledgeable, is prudent also without coercion.

In case of assessment of property other than assessment of assets for the financial reporting, the term "assets" provided in paragraph one of Item 3 NSOI N 5, in determination of market value usually is replaced with Appraisers with the term "property". This replacement helps to distinguish the estimates which are carried out for the financial reporting and relating to the assets reflected in documents of financial accounting of the company from other types of tasks by assessment.

All methods, methods and procedures of measurement of market value if they are applicable and are used pertinently and correctly, lead to general expression of market value when they are based on the criteria having market origin. The method of comparison of sales or other methods of market comparisons shall proceed from market researches. Construction costs and the amount of depreciation shall be determined on the basis of the analysis of payment of costs under market data and cumulative depreciation. The capitalization method of the income or method of the discounted cash flow shall be based on the cash flows determined by the market and on the return rates based on data of the market. Though availability of information, and also situation in the market and around the asset will determine what of evaluation methods most we accept and is adequate, use of any of the above-stated procedures shall lead to establishment of market value if each of methods is based on market data.

Applicability of various methods and assessment procedures of market value is determined proceeding from method by what sale of property in the public market is usually performed. Being based on market information, each method is comparative method. In each situation connected with assessment, some one or several evaluation methods give the greatest idea of activities of the public market. In case of each task on establishment of market value the Appraiser shall consider all methods and determine the most suitable of them.

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