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LAW OF UKRAINE

of June 16, 2011 No. 3531-VI

About features of management of objects of state-owned property in defense industry complex

(as amended of the Law of Ukraine of 14.07.2016 No. 1475-VIII)

This Law determines features and the legal basis of management of objects of state-owned property in defense industry complex.

Article 1. Law purpose

1. The purpose of this Law is determination of features of management of objects of state-owned property in defense industry complex, ways of increase in efficiency of functioning of the companies of defense industry complex and ensuring control of their activities.

Article 2. Objects of management of state-owned property in defense industry complex

1. In defense industry complex treat objects of management of state-owned property:

property of the state companies of defense industry complex, including the state companies which are part of Ukroboronprom State concern;

the property transferred in accordance with the established procedure to Ukroboronprom State concern;

the blocks of shares belonging to the state in the authorized capital of joint-stock companies which performs activities in defense industry complex, and transferred in accordance with the established procedure to the control Ukroboronprom State concern.

Article 3. Subjects of management of objects of state-owned property in defense industry complex

1. Subjects of management of objects of state-owned property in defense industry complex are:

Cabinet of Ministers of Ukraine;

Ukroboronprom state concern.

Article 4. Ukroboronprom state concern

1. The Ukroboronprom state concern (further - Concern) is authorized subject of housekeeping on management of objects of state-owned property in defense industry complex.

2. The state companies of defense industry complex, including the state companies (further - members of Concern), on the basis of financial dependence from one or group of members of Concern which performs functions on ensuring scientific and technical and production development, and also performs investment, financial, external economic and other types of activity are part of Concern.

3. Members of Concern are not in management of executive bodies.

4. The concern acts on the basis of the this Law and the Charter which affirms the Cabinet of Ministers of Ukraine on representation of the Supervisory board of Concern.

Article 5. Governing bodies of Concern

1. Governing bodies of Concern are its Supervisory board, the Board of directors, the CEO.

2. The supreme body of management of Concern is its Supervisory board which provides protection of interests of the state, controls and regulates activities of other governing bodies of Concern.

3. The supervisory board of Concern (further - the Supervisory board) consists of five members, three of whom are appointed the President of Ukraine, and two - the Cabinet of Ministers of Ukraine.

The term of office of members of the Supervisory board constitutes five years.

4. The president of Ukraine or the Cabinet of Ministers of Ukraine can stop ahead of schedule powers of the member of the Supervisory board whom they appointed.

Members of the Supervisory board work on a voluntary basis.

5. The supervisory board carries out the work in the form of meetings.

The CEO of Concern who has the right of advisory vote is invited to meeting of the Supervisory board.

6. The board of directors of Concern is collegiate organ of management which determines the development strategy and activities of Concern, production and investment development plans for Concern and its participants, the principles of implementation of production and scientific and technical communications between members of Concern for the purpose of accomplishment by Concern and its participants of the tasks assigned to them in the sphere of defense industry complex and military and technical cooperation.

Representatives of members of Concern are part of the Board of directors of Concern.

7. The procedure for activities, convocation, vote, acceptance and execution of solutions of the Board of directors of Concern and its powers are determined by the Charter of Concern.

8. The CEO of Concern performs direct management of its activities.

The procedure for appointment and powers of the CEO of Concern are determined by the Charter of Concern.

Article 6. Supervisory board of Concern

1. Belong to exclusive competence of the Supervisory board:

1) approval of the development strategy and activities of Concern;

2) approval of financial and investment plans and indicators of activities of Concern, including annual financial and investment plans, and also investment plans for the medium term (3-5 years);

3) control of accomplishment by Concern and its participants of the tasks assigned to them in the sphere of defense industry complex and military and technical cooperation;

4) preparation and representation on approval of the Cabinet of Ministers of Ukraine of drafts of the Charter of Concern and regulatory legal acts concerning modification of it;

5) decision making concerning participation of Concern in the authorized capital of economic societies, other legal entities whose purpose of activities is assistance to development, production and export of high-tech industrial output of defense industry complex;

6) decision making concerning creation of branches and representative offices of Concern;

7) ensuring carrying out by Concern of contributions to the Government budget of Ukraine of part of profit (income);

8) control of effective use and preserving the objects of state-owned property transferred to the control Concern, implementation of financial and economic activities of Concern;

9) approval of annual statements of the CEO of Concern about results of activities of Concern and management of objects of state-owned property in defense industry complex;

10) initiation of conducting checks, audits and audit, financial and economic activities of Concern and its participants, determination of the auditor of Concern;

11) representation to the Cabinet of Ministers of Ukraine of offers concerning reorganization or liquidation of Concern.

2. The supervisory board can bring in accordance with the established procedure representation concerning accountability of officials of Concern and its participants.

3. The organization, procedure for activities, convocation, vote, acceptance and execution of solutions of the Supervisory board are determined by the Charter of Concern.

Article 7. Features of management of objects of state-owned property in defense industry complex

1. In process of management of objects of state-owned property in defense industry complex Concern:

1) exercises regulation, control and coordination of activities of members of Concern;

Creates 2) the companies, joint businesses and other legal entities based on state-owned property in defense industry complex, makes the decision concerning their reorganization and liquidation;

3) approves charters (provisions) of members of Concern and regulating documents concerning modification of them, exercises control of observance of their requirements;

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