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

of October 6, 2009 No. 01/19-18/20

About approval of the National standard of assessment of property of the Republic of Uzbekistan "Property value assessment for the purpose of privatization"

According to the Law of the Republic of Uzbekistan "About estimative activities", Resolutions of the President of the Republic of Uzbekistan of April 26, 2006 "About measures for enhancement of activities of the State Property Committee of the Republic of Uzbekistan" and of April 24, 2008 No. PP-843 "About further enhancement of activities of the estimative organizations and increase in their responsibility for quality of the rendered services" the State committee of the Republic of Uzbekistan on management of state-owned property decides No. PP-335:

1. Approve the National standard of assessment of property of the Republic of Uzbekistan "Property assessment for the purpose of privatization" according to appendix.

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

Appendix

to the Resolution of the State Property Committee of the Republic of Uzbekistan of October 6, 2009 No. 01/19-18/20

National standard of assessment of property of the Republic of Uzbekistan (NSOI No. 8) "Property value assessment for the purpose of privatization"

This National standard of assessment of property (NSOI No. 8) according to the Law of the Republic of Uzbekistan "About estimative activities" (Sheets of Oliy Majlis of the Republic of Uzbekistan, 1999, No. 9, the Art. 208), the resolution of the President of the Republic of Uzbekistan of April 24, 2008 No. PP-843 "About further enhancement of activities of the estimative organizations and increase in their responsibility for quality of the rendered services" (The collection of the legislation of the Republic of Uzbekistan, 2008, No. 18, of the Art. 145) determines normative regulation of estimative activities in the Republic of Uzbekistan.

Chapter I. General provisions

1. The purpose of NSOI No. 8 is setting standards and governed in case of cost determination of subjects to privatization and reflection of results of assessment.

2. The main objectives of NSOI No. 8 are:

ensuring coordination of actions of appraisers by use of standard concepts and rules of assessment of subjects to privatization;

determination of the procedures designed to help objectivity and improvement of quality of assessment;

establishment of requirements to initial information, contents of the valuation report and to the statement of material excluding ambiguous interpretation of valuation reports;

assistance to forming of effective national system of assessment of property.

Chapter II. Terms and determinations

3. In NSOI No. 8 the following terms and determinations are used:

analog - similar according to the main economic, physical and other characteristics with assessment object other object which price is known from the transaction which took place under similar conditions or from the proposal made in the competitive market;

date of assessment - date for which assessment project cost is determined;

cash flow - the actual or settlement periodic income created by receipts and costs (expenses) in case of operation and (or) sale of property, revenue-producing;

discounting - reduction of future cash flows expected from assessment object in current value with use of the corresponding discount rate;

assumptions - the assumptions of the appraiser which are considered true. Assumptions contain the facts, conditions or situations influencing object of assessment or approaches of assessment which check and confirmation are impossible;

depreciation (impairment) - loss of property value under the influence of various reasons from which distinguish physical wear, functional and external (economic) impairment;

indexes of rise in price of the prices - price indexes of the manufacturing companies of industrial output for the corresponding column depending on type of each line item of object of assessment (construction materials, machines the equipment, the equipment and technologies, etc.), and also price indexes of producers of manufactured goods on industrial activity (B, C, D, E) The nation-wide qualifier of types of economic activity of the Republic of Uzbekistan;

capitalization - transformation of the receipts expected from assessment object in its current value;

control share - the participation in property (share in authorized capital of the company) providing to its owner control over the company;

the animator - the coefficient showing ratio between the price or other cost basis of the company and the financial, production or material indicator characterizing its activities;

restrictive conditions - the restrictions imposed on assessment by the legislation, the customer or the appraiser;

risk - probability not of achievement of the predicted results or any variation from them, capable to exert impact on assessment project cost;

specialized property - property which owing to the specifics (caused by nature of this property or its structure, features of configuration, the size, location, etc.) has the limited sphere of use;

discount rate - the return rate used for transformation of future cash receipts to current value;

capitalization rate - divider, as a rule, expressed in percentage terms, used for transformation of size of the income for certain period in cost.

Chapter III. Scope

4. Assessment objects for the purpose of privatization (further - assessment object) are:

the state unitary enterprises or public institutions as property complexes (further - the companies);

the real and personal estate which is in property of the state;

the securities belonging to the state;

the shares and property shares belonging to the state in authorized funds of legal entities;

the intangible assets belonging to the state (except intellectual property items).

The state assets interconnected among themselves and representing in total property complex without formation of legal entity are estimated as the amount of market value of all assets.

5. NSOI No. 8 is intended for the estimative organizations, appraisers and customers of estimative services and is subject to obligatory application when rendering services in value assessment of objects of assessment for the purpose of privatization and check of reliability of valuation reports of the privatized property.

In case the stocks (shares) and stocks (shares) of the same company which are not owned by the state which are at the same time owned by the state are subject to assessment, then in this case assessment is performed according to requirements of NSOI No. 8.

6. NSOI No. 8 does not extend to value assessment:

the objects of assessment realized within insolvency proceedings;

the privatized state housing stock (except for objects of the state housing stock, privatizeable on market value);

air and water vehicles;

intellectual property items, privatizeable as the isolated assessment objects.

7. Assessment project cost determined according to NSOI N 8 is the starting price of subject to privatization recommended for appointment. The price established in case of the taken place transaction in case of privatization can differ from the cost determined when evaluating.

8. In case of application of NSOI No. 8 it is necessary to be guided by the Methodical instructions given in appendix to this NSOI No. 8.

Chapter IV. Interrelation with accounting standards

9. Determination of the term "depreciation" in estimative practice needs to be distinguished in sense from the similar term used in financial accounting (depreciation charges). With respect thereto, appraisers shall use the terms "depreciation" or "the added depreciation" according to the general principles and concepts of assessment reflected in the National standard of the Republic of Uzbekistan of property assessment (NSOI No. 1) (reg. No. 1604 of 24.07.2006) (Collection of the legislation of the Republic of Uzbekistan, 2006, No. 30, the Art. 302).

Determinations "fixed assets", "inventory stocks", "intangible assets", "original cost", "current value", "residual (balance sheet) cost" should be understood the same as they are used in financial accounting.

10. The main distinction of NSOI with documents of the financial reporting is that monetary value of the cost applied in case of assessment object assessment is not historic fact, but assessment of usefulness of object in specific timepoint according to the chosen cost type. This value assessment can differ from the cost reflected in the financial reporting.

Chapter V. Requirements of the standard

11. Assessment object value assessment for the purpose of privatization consists of the following stages:

determination of task for assessment and conclusion of the agreement on assessment object assessment;

identification of object of assessment; collection and information analysis;

the analysis of the best and most effective use of object of assessment (for the cases provided by NSOI No. 8);

choice, reasons and application of approaches and evaluation methods;

coordination of results, the applied approaches of assessment and calculation of total cost of object of assessment;

creation of the valuation report.

§ 1. Determination of task for assessment and conclusion of the agreement on assessment object assessment

12. The task for assessment is constituted by the customer together with the estimative organization and drawn up as appendix to the agreement on assessment object assessment. The task for assessment shall contain:

name and description of object of assessment;

date of assessment;

purpose (purposes) of assessment and intended use of results of assessment;

the cost type answering assessment purpose;

restrictive conditions;

the list of initial information which shall be provided by the customer or person authorized by it;

terms of carrying out estimative works.

Depending on the purpose of assessment and features of object of assessment the task for assessment may contain additional terms.

13. In case of privatization of state-owned property market value of object of assessment is determined if other is not established by decisions of the manager of objects of state-owned property. Depending on assessment purposes also along with market the cost other than market can be determined. In circumstances when establishment other than market value, the reason of application and distinction between the determined and market value is necessary shall be opened and described in the valuation report.

14. The type of the determined cost shall be established in task for assessment and in subsequent is reflected and explained in the valuation report.

§ 2. Identification of object of assessment

15. In case of identification of object of assessment the appraiser establishes compliance to the submitted documentation to actual state of object of assessment and property rights on it. Also the analysis of possible assumptions and restrictive conditions which can arise in the course of assessment is carried out.

16. Identification of object of assessment is performed by the appraiser on the basis of provided by the customer and (or) person of documentation authorized by it by survey, measurement, photography (if necessary), studying of the actual availability and condition of object of assessment, its description including the name of object, its organizational legal form, location, physical structure, technical characteristics and other data reflecting specific features of object of assessment.

17. In case of assessment of shares, shares (shares) the appraiser shall carry out identification of the rights of the owner to these objects on compliance to the documents submitted by the customer or person authorized by it, namely: to constituent documents of the company (issuer) and data of Central Securities Depository and (or) investment intermediary.

18. In coordination with the customer identification of object of assessment (its components) can have limited character in connection with specifics of activities of object of assessment and (or) quantity of units of fixed assets.

Limited nature of identification of object of assessment is specified in task for assessment along with restrictive conditions.

19. In case of identification of the facts of discrepancy of the provided documentation and actual state of object of assessment and property rights on it, the appraiser shall inform on it the customer and (or) person who provided documentation and to demand entering into it of the corresponding adjustments.

In case of refusal the customer and (or) person who provided documentation to bring it into accord with requirements of the appraiser or impossibility of entering into it of necessary adjustments, the appraiser can refuse evaluating or in coordination with the customer to perform assessment proceeding from actual state of object of assessment, having reflected the fact of discrepancy of the provided documentation and condition of object of assessment in the valuation report.

§ 3. Collection and information analysis

20. Collection and information analysis includes obtaining and studying:

documents of title on assessment object;

accounting data and the reporting relating to assessment object;

data on structure of object of assessment, structure of the estimated rights and documents confirming these rights;

data on encumbrances of object of assessment and servitudes;

restrictions of use of object of assessment;

technical characteristics of object of assessment and its components;

information on condition and dynamics of the market to which assessment object belongs;

other information.

In case of assessment of the companies (shares, the share, shares) in addition studies characteristics and development plans for the company (issuer);

21. In case of assessment of objects of assessment it is used:

the initial information obtained from the customer or person authorized by him and also the information obtained by the appraiser from data of accounting, primary and statistical recording, certified by the signature of the head (the asset holder, the issuer) of assessment object;

the information obtained from the third parties involved in performance of works, certified by their signature;

the information obtained from the specialized organizations (industry, state-of-the-art reviews, reviews of the stock market), including published in mass media and the Internet;

the other information (received on survey results, interview and other sources), at the same time responsibility for use of this information is conferred on the appraiser.

22. In case when cash flows in the middle of forecast year (are assumed in case of seasonality of production, on condition of receipt of the income parts within year), the cash flow is discounted from the middle of forecast period.

Calculation is carried out on formula:

If date of assessment does not match from the beginning of financial year, then the annual cash flow is calculated in the following procedure:

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