Investment offer JSC «Kashkadaryaneftegazpromstroy»

LIST OF CONTENT 1 Abstract 4 1.1. General information about the company 4 1.2. Rational reasonability of the development of enterprise 5 1.3. Financing requirement 5 1.4. The share of the company delivered to the investors 6 1.5. Marketing plan summary 7 1.6. Key financial indicators forecast 8 1.6.1. Forecast of revenues and earnings for 2015 - 2020 8 1.6.2. Forecast of investments and income for 2015-2020 9 1.6.3. Net profit forecast for 2015-2020 10 1.7. Main benefits and risks of the project 10 1.8. Main indicators of investment attractiveness of the project 10 2 Company Description 11 2.1. History of the company 11 2.2. Information about the owners (shareholders) of the Company 13 2.3. Structural organization of the company 14 2.4. Administration and management 14 2.5. The main financial indicators for the 5 years 16 3 Organization of the production 17 3.1. Machine and mechanism 17 3.2. Production assets, capacity, infrastructure 18 1. UE «Kashkadaryatransdorpromstroy» 18 2. UE «Kashkadaryaspewenergomontaj» 18 3. UE «Kashkadaryactroymontajservis» 18 4. UE «Kashkadaryapromstroymaterial» 18 5. UE «Kashkadaryatransservisstroy» 18 6. UE «Kashkadaryaneftegasstroyinvest» 19 3.3. Raw materials base 19 3.4. Impact on the environment 19 4 Description of works / services 19 4.1. Main types of works/services 19 4.2. Purpose and scope 19 4.3. The main characteristic 20 4.4. The main features, benefits of customers 20 4.5. The presence or the need for licensing 21

4.6. The degree of readiness for release and sales 21

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 4.7. The need for certification, and certificates 22 4.8. The need for and the possibility of modernization of products 22 (works / services) 4.9. Guarantee and service 22 5 Market review 23 5.1. The general analysis of the market, works and services 23 5.2. Market segmentation, analysis capacity, saturation, and 23 dynamics of market segments 5.3. Analysis of the competitive environment 23 5.4. Marketing and sales strategy works and services 23 5.5. Marketing analysis of the strengths and weaknesses of the 24 company 6 Financing plan 26 6.1. Conventions used in the construction of financial models 26 6.2. The financing structure 27 6.3. The results of the financial model of the project 27 6.4. Investment Analysis Project 28 6.5. Analysis of sensitivity and scenario analysis 29 7 The main risks analysis 30 7.1. Characteristics of the main risks 30 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 30 risks 7.3.Conclusions and recommendations 31 8 Contact information 32

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 1. Abstract 1.1. General information about the company Joint Stock Company "Kashkadaryaneftegazpromstroy" was created under the state program of privatization on the basis of state-owned enterprises, the order №785 dated from 29.12.1994, the Kashkadarya Territorial Administration of State Property Committee of . Address of the Company: 180204, Republic of Uzbekistan, Kashkadarya region, Karshi district, Mevazor village, Navruzkurgani.

In accordance with the Law of the Republic of Uzbekistan "On joint-stock companies and protection of shareholders' rights" on May 6, 2014 and the decision taken at an extraordinary general meeting of shareholders on January 30, 2015 and registered on the Charter, in the new edition of 27.02.2015, №65, the name of the company was renamed to JSC "Kashkadaryaneftegazpromstroy» («Qashqadaryoneftgazsanoatqurilish» joint-stock- company).

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Investment offer JSC «Kashkadaryaneftegazpromstroy» The main activity of JSC "Kashkadaryaneftegazpromstroy" is the construction and commissioning of the production capacity of the fuel and energy complex production facilities for civil construction. In addition to performing contractual construction works, the Company manufactures products for industrial purposes, produces consumer goods, providing services.

1.2. Rational reasonability of the development of enterprise

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, 2014 №75 «On measures for the effective management of State Property"; - development and introduction of new technologies and equipment; - 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"

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 1.4. The share of the company delivered to the investors

JSC "Kashkadaryaneftegazpromstroy" was established as a joint stock company. Today the Company’s statutory fund is 768 795 000 UZS. Statutory fund of the Company is divided into 512 530 shares with a par value of 1500,0 UZS Share of the shareholder № Shareholder Items of Thousand % shares UZS 1 JSC «Uzneftegazstroyinvest» 261 388 392 082 51,00 2 Share of other legal entity 6 743 10 114,5 1,32 The proportion of individuals (2,210 3 244 399 366 598,5 47,68 people). TOTAL 512 530 768 795 100

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 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 "Kashkadaryaneftegazpromstroy" is projected to be sold in the amount of 51% to strategic foreign investors.

The distribution of the statutory fund of JSC "Kashkadaryaneftegazpromstroy" after the implementation of the Presidential Decree dated from April 28, 2015, # PD-2340 will appear in the following order:

Share of the shareholder № Shareholder Items of Thousand % shares UZS 1 Share of the strategic foreign investor 261 388 392 082 51,00 2 Share of other legal entity 6 743 10 114,5 1,32 The proportion of individuals (2,210 3 244 399 366 598,5 47,68 people). TOTAL 512 530 768 795 100

1.5. 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 cost- effective 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. 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

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 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.

1.6. Key financial indicators forecast 1.6.1. Forecast of revenues and earnings for 2015 – 2020.

Indicators 2015 2016 2017 2018 2019 2020

Total income 28 835 30 275 31 785 33 375 35 050 36 800 including income from 21 830 22 920 24 100 25 305 26 570 27 900 construction activities The total costs 28 115 29 490 30 930 32 442 34 035 35 700

Direct production costs 23 900 25 100 26 300 27 600 29 000 30 350

Period expenses 4 215 4 390 4 630 4 842 5 035 5 350 Income from financial 5 6 7 8 9 10 operations Profit before tax 725 791 862 941 1 024 1 110

Income tax and tax on profits 370 400 440 480 520 565

Net income 355 391 422 461 504 545

Taking into consideration of development works and services for the past 6 years and taking into account strategic objectives assigned to the Company's, the total revenue in 2020 is projected at the rate of 36 000 mln. UZS or 1,3 times more than in 2014. And over the past 6 years and taking into account the tasks set to the Company, the total projected profits in 2020 of 545 mln. UZS or 3,3 times more than in 2014.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 1.6.2. Forecast of investments and income for 2015-2020

The investments of the Company in 2020 will be amounted 1 700,0 mln. UZS

The average annual income to invest in period of 2015-2020 will estimate 20%.

Provision is further improving and intensifying investment activities will be through the following:

- placement of funds from the sale of shares of JSC "Kashkadaryaneftegazpromstroy" in financial instruments large and strong domestic banks;

- growth in scope of works and services;

- enhance monitoring and analysis of the Customers, to which the company carried out works and services.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 1.6.3. Net profit forecast for 2015-2020

The projected net profit for the 2015-2020 will increase by 3,3 times from 163 million UZS in 2014 up to 545 million UZS in 2020.

1.7. 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.

1.8. Main indicators of investment attractiveness of the project

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Investment offer JSC «Kashkadaryaneftegazpromstroy» The main indicators characterizing investment attractiveness of the participation of potential investors in the capital of JSC "Kashkadaryaneftgazpromstroy" include: - the Company is considered as one of the leading construction company 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 "Kashkadaryaneftgazpromstroy" in the amount of 768 795,0 thousand UZS. - the policy pursued by the company, as a priority, aimed at expanding the regional network and the scale of its activities; - a high level of financial stability and solvency of the company, confirmed by the financial indicators over the past 4 years, exceeding the set standard for more than 2 times. 2. Company Description 2.1. History of the company In accordance with the Presidential Decree dated from 11.12.1998, the PD-2154 "On the transformation of the National Corporation of Oil and Gas Industry" Uzbekneftegaz ", the Resolution of the Cabinet of Ministers dated from 15.12.1998, № 523" On organization of the National Holding Company "Uzbekneftegaz" and the order of Territorial Administration of the State Property Committee of the Kashkadarya region on December 29, 1994 №785 was established JSC" Kashkadaryaneftegazpromstroy. "

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Investment offer JSC «Kashkadaryaneftegazpromstroy»

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 July 29, 2007 №339-P, JSC "Kashkadaryaneftegazpromstroy" is a structural subdivision of the Company "Uzneftegazstroyinvest", National Holding Company "Uzbekneftegaz" .

In accordance with the Law of the Republic of Uzbekistan "On joint-stock companies and protection of shareholder rights" dated from May 6, 2014, № LRU-370, and the decision taken at an extraordinary general meeting of shareholders on January 30, 2015 and registered by the Charter in the new edition from 27.02.2015 №65 for the name of the company was renamed to JSC "Kashkadaryaneftegazpromstroy» («Qashqadaryoneftgazsanoatqurilish» jopint-stock-company). 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.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 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. In addition, measures were taken for the development, implementation and use of modern information technology to improve the quality of services.

2.2 Information about the owners (shareholders) of the Company 2.2. - share of JSC "Uzneftegazstroyinvest" - 51,00 %, 392 082 000 UZS, 261 388 items of share; - share of other legal entity- 1,32%, 10 114 500 UZS, 6 743 items of share; - share of individuals (2210 people) - 47,68%, 366 598 500 UZS, 244 399 items of share

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 2.3. Structural organization of the company

2.4. Administration and management:

The structure of the administration of JSC "Kashkadaryaneftegazpromstroy": Chairman of the board: Rahimov Ruziqul Rajabovich, tel: 0 (375) 575-23-65 First deputy Chairman of the board : Shanazarov Keldiyar, tel.+99 890 3133633.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» Staff: № Category of personnel Quantity 1 Managers 78 2 Specialists 53 3 Technicians 40 4 Service personnel 30 5 Production personnel 741 942

Average salary Average salary № Category of personnel (month) (year) 1 Managers 776 8172 2 Specialists 722 10044 3 Technicians 842 10416 4 Service personnel 654 8364 5 Production personnel 367 4476

2012 2013 2014 Indicators Average Average Average Average Average Average WF number salary WF number salary WF number salary of emp. (year) of emp. (year) of emp. (year) 7167. 7174. total 1587 376.4 1315 454.7 5514 988 465.1 3 9 managers 735.2 98 625.2 904 48 1569.8 695 26 2227.6 specialists 389.9 57 570.0 890.3 53 1399.8 684 12 4750.0 technicians 228.2 35 543.3 420.2 80 437.7 323 20 1345.8 production 5677. 1363 347.1 4525 1097 343.7 3477 920 314.9 personnel 2 service personnel 136.8 34 335.3 435.4 37 980.6 335 10 2791.7

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 2.5. The main financial indicators for the last 5 years Including date by year Designation 2010 2011 2012 2013 2014 Gross revenue (mln. UZS) 27 106 49 048 35 278 36 357 27 463 The scope of construction 22 498 37 814 27 321 26 316 20 792 activities on its own (mln. UZS) Costs 1 sum income (tiyin) 97,50 96,0 97,3 97,5 98,1 Costs 1 sum of income from 97,22 96,8 96,7 98,0 95,4 construction activities (tiyin) Balance sheet profit (mln. UZS) 677 1 292 935 916 526 Net profit (mln. UZS) 336 706 437 392 163 Profitability (%) 2,6 2,7 2,7 2,6 2,0 Number of total employees 1 552 1 544 1 587 1 314 1 007 (people) Overall productivity per 1 employee in current prices 1 455 2 647 1 921 2 400 2 361 (thousand UZS) Wages Fund - all ((mln. UZS)) 5 902 9 015 7 167 7 174 5 513 The average salary of 1 316,9 486,5 376,4 455,1 456,3 employee (thousand UZS) - the amount of net profit in 2014 is amounted to 163 mln UZS. Thereby continuing to ensure stable profitability of the Company; - it is formed a new, methodical and methodological base of the Company relevant market competition, in order to implement the principles of maintaining an adequate level of financial stability based on the dynamic growth of the share capital.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 3. Organization of the production

3.1. Machine and mechanisms

Type is machine Quantity Run-out up Run-out up Run-out up and mechanisms units to 50% to 80% to 100% Machinery and 57 23 7 27 equipment Vehicles 114 32 10 72

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 3.2. Production assets, capacity, infrastructure

The structure of the JSC "Kaschkadaryaneftegazpromstroy" includes the following Unitary Enterprises:

1. UE "Kashkadaryatransdorpromstroy" It is the general contractor specialized organization for the construction of main oil and gas pipelines, water pipelines and other facilities construction line. Performs installation, insulation and styling and earthworks. In addition, it engaged in the operation of construction machines and mechanisms, provides the objects of society mechanisms. 2. UE "Kashkadaryaspetsenergomontazh" It is a specialized enterprise which deals with installation works. The enterprise provides electric installation works and adjustment works on industrial and civil construction objects. 3. UE "Kashkadaryastroymontajservis" It is the general contractor specialized organization for civil construction works at the objects of housing, community facilities, industrial buildings and structures. 4. UE "Kashkadaryapromstroymaterial" It provides a complete set of material and technical resource facilities for construction purposes to all enterprises under the JSC "Kashkadaryaneftegazpromstroy". In addition, the company carries out construction works on the objects of housing, community facilities, industrial buildings and structures. 5. UE"Kashkadaryatransservisstroy" It is the general contractor specialized organization for civil construction works at the objects of housing, community facilities, industrial buildings and structures.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 6. UE "Kashkadaryaneftegazstroyinvest" It is the general contractor specialized organization for civil construction works at the objects of housing, community facilities, industrial buildings and structures.

The need for new / additional production equipment The need for the acquisition of fixed assets for modernization and development of production detail is in the business plan of the Company for each accounting period.

3.3. Raw materials base Components of the material and technical resources the company is able to engage on its own. 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. 3.4. 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.

4. Description of works / services 4.1. Main types of works and services:

The JSC "Kashkadaryaneftegazpromstroy" is able to carry out all kinds of civil works, but mainly aims to maintain capital construction and repair facilities in the fuel and energy complex. In addition to that the Company performs commercial traffic services, launched production of reinforced concrete products, necessary for the conduction of construction. 4.2. 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 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

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 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. 4.3. Main characteristics The main aim of the company is to combine economic interests and intellectual potential, material and non-material, labor and financial resources of its shareholders for economic activities, aimed at making a profit, with the implementation of construction and installation work including the production of building materials for its needs. The main areas of activity are: - implementation of construction and assembling works on the domestic market; - production and sales of building materials and structures; - technical and technological re-equipment of the Company. 4.4. The main features, benefits of customers The main features characterizing the quality of services provided by JSC "Kashkadaryaneftegazpromstroy" 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.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 4.5. The presence or the need for licensing

4.6. The presence or the need for licensing JSC "Kashkadaryaneftegazpromstroy" 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.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 4.7. The need for certification, and certificates

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.

4.9. Guarantee and service JSC "Kashkadaryaneftegazpromstroy" 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.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 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. 5.2. 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. 5.3. Analysis of competitive environment JSC "Kashkadaryaneftegazpromstroy" 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. 5.4. Marketing and sales strategy works and services The main point of dissemination of works and services is traditionally own advertising display. The implementation of the main scope work and services performed by legal entities of the Company.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» In the face of increasing competition, maintaining the strong position of JSC "Kashkadaryaneftegazpromstroy" 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 cost- effective 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. 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

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 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 Competitive deficiency Presence of one of the biggest Low level of material base in regional base of materials and sub regional sub structural organizations structural organizations Qualified specialists in key Lack of qualified specialists in sub positions of production section and structural organizations of the company management board and fluctuation movement of personnel Well developed and productive methods of work and services. Experience in the filed construction Lack of working and service works and services in Uzbekistan. experience in international market. Wide range of services provided. High level of reliability and Decreasing liquidity of investments financial stability Individuality of provided works and service Long-term partnership Customer base Introduction of IT in function of the Company Capabilities Risks Low level of foreign company Risk of functioning many foreign operational in the market companies in the domestic market Increase in the level of average Increased inflation (growth in salary and standards of living in the prices) country High demand for Company service Customer loose due to competitive due to active loans for vehicles by the environment government

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 6. Financing plan Items of № Indicators 2015 2016 2017 2018 2019 2020 measurement

1 Development plan for 2015-2020 Investments 1.1 USD 5 315 752 5 422 067 5 530 427 5 641 086 5 754 046 5 869 050 requirement Forecast of production 1.2 USD 29 134 410 29 717 098 30 311 287 30 917 487 31 535 954 32 166 689 of goods

6.1. 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. Calculation is carried out operating profit, profit before tax, income taxes and net income.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 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. 6.2. 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. 6.3. The results of the financial model of the project

Indicators 2015 2016 2017 2018 2019 2020

Total profit 28 835 30 275 31 785 33 375 35 050 36 800

Total expense 28 115 29 490 30 930 32 442 34 035 35 700

Net profit 355 391 422 461 504 545

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 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. 6.4. 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 1.5 - 2 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 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 2015-2019, estimates of the profitability of the authorized capital, return on assets and earnings per share are as follows:

Indicators 2015 2016 2017 2018 2019 2020 Profitability of the 0,46 0,50 0,54 0,60 0,66 0,71 statutory stock (%) Profit per share (UZS) 692,6 762,9 823,4 899,5 983,4 1063,4

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 6.5. 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 - 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.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 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.

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

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 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.

7.3. 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.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 8. Applications - Contact information:

- Mailing adress: 180204, Republic of Uzbekistan, Kashkadarya region, district Karshi, Navruz village, Mevazor MFY - Means of communication: Tel: (0375) 575-23-61, fax: 0375) 575-23-65. - e-mail: [email protected] - www. kngsk.uz - Codes of the company: - OKPO (General Classification of Enterprises and Organizations) 14850469 - IIN (Tax identification Number) 200667525 - SOATO (Indications System for Administrative-Territorial Formations),: 1710224 - OKONKh (General Classifier of Economy Branches): 69000 - SOOGU (Government designation system) 1024 - FS (Federal Assembly) 144 - OPF (Legal form of Organization) 153 - Bank details: Karshi branch of joint-stock commercial bank “Uzpromstroybank” - O\A 20210000000305469001, MFO 00854

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.

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Investment offer JSC «Kashkadaryaneftegazpromstroy» Rahimov Ruzikul Rajabovich Starting from April 22, 2014: Acting Chairman of the board of JSC “Kashkadaryaneftegazpromstroy”

Date of birth: Place of birth: 15.06.1953 Kashkadarya region, Guzor district Nationality: Party member: Uzbek National Democratic Party Education: Graduated from: Higher 1974, Tashkent Financial Institute

Specialty: trade-economy Knowledge of foreign languages: Russian

WORK EXPERIENCE 1970-1974 - student of Tashkent Financial Institute 1974-1975 - economist at procurement department of the 3rd representative office of the “Karshikurilish” construction union. 1975-1976 – assistant economist at workers supply department of the “Karshikurilish” construction union. 1976-1982 – chief accountant, economist at procurement department of the 3rd representative office of the “Karshikurilish” construction Union. 1982-1984 – deputy director of the “Karshikurilish” construction Union. 1984-1989 - chairman of the board at Matlubot people’s society, in Kashkadarya region 1989-1991 – deputy chairman of the board at Matlubot people’s society, in Kashkadarya region 1991-1994 – chairman of trade society at Kashkadarya region 1994-1996 – chairman of “Kashkadaryagushtsanoat” Union 1996-1996 – head of the capital issues and privatization department of tej Union “Uzgushtsutsanoat” 1996-1998 – deputy director of the “Karshikurilish” construction Union 1998-2001 – chairman of the board of the JSC “Kurilish materiaali ishlab chikarish va butlash”. 2001-2006 – deputy Chairman of the voard of JSC “Kashkadaryaneftgazpromstroy” 2006-2014 – director of UE “Kashkadaryakurilishmontakservis” of of JSC “Kashkadaryaneftgazpromstroy”

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Investment offer JSC «Kashkadaryaneftegazpromstroy» 2014-2014 – first deputy Chairman of the board of of of JSC “Kashkadaryaneftgazpromstroy”

2014- present – acting Chairman of the board of JSC “Kashkadaryaneftegazpromstroy”

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Investment offer JSC «Kashkadaryaneftegazpromstroy»

Sultanov Begali Balliyevich

Starting from November 23, 2009: Acting deputy Chairman of the board of JSC “Kashkadaryaneftegazpromstroy” on construction and production issues Date of birth: Place of birth: 15.11.1961 Kashkadarya region, districtи Nationality: Party member: Uzbek N\A Education: Graduated from: Higher 1988, Samarkand State Architecture Institute Specialty: agricultural construction Knowledge of foreign languages: Russian

WORK EXPERIENCE 1979-1980 – worker at hourse farm at Yakkabog 1980-1982 – Army service 1982-1983 - worker at hourse farm at Yakkabog 1983-1988 – student at Samarkand State Architecture Institute 1988-1991 – engineer at district National Education 1991-1992 – welder at installation department of construction enterprise “Uzbeksanoatkurilish”1992-2009 – chief engineer, chief manager, master, welder at UE “Kashkadaryaneftgazkurilishinvest” 2009й. - present. - acting deputy Chairman of the board of JSC “Kashkadaryaneftegazpromstroy” on construction and production.

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Investment offer JSC «Kashkadaryaneftegazpromstroy»

Mukimov Avazbek Kurbonovich

Starting from March 25, 2014: Acting deputy Chairman of the board of the JSC “Kashkadarayneftgazpromstroy” Date of birth: Place of birth: 15.04.1960 Andijan region, Asaka district Nationality: Party member: Uzbek N\A Education: Graduated from: Higher 1983, Samarkand State Architecture Institute Specialty: civil and industrial construction

Knowledge of foreign languages: Russian

WORK EXPERIENCE 1977-1978 - laboratory assistan at Cotton scientific Institution 1978-1983 – student at Samarkand State Architecture Institute 1983-1985 – army Service 1985-1989 – chief master at “Agrokomkurilishtamirlash” Union 1989-1992 – chief engineer at engineering department of “Karshikurilish” Union 1992-2007 – labarotary director at JSC “Kashkadarayneftgazpromstroy” 2007-2008 – deputy chairman of the board at JSC “Kashkadarayneftgazpromstroy” on production and construction 2008-2011 – director of UE “Kashkadaryatransserviskurilish” 2011-2012 – chief manager at UE “Kashkadaryatransserviskurilish” of JSC “Kashkadarayneftgazpromstroy” 2012-2013 – acting chief engineer at UE “Kashkadaryatransserviskurilish” of JSC “Kashkadarayneftgazpromstroy” 2013-2014- acting first deputy Chairman of the board JSC “Kashkadarayneftgazpromstroy” 2014-present- acting deputy chairman of the board of the JSC “Kashkadarayneftgazpromstroy”

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