RESOLUTION OF THE CABINET OF MINISTERS OF THE AZERBAIJAN REPUBLIC

of December 30, 2016 No. 534

About profit and loss budgets of large state-owned companies

For the purpose of ensuring fiscal stability in financial and economic activities of large state-owned companies, strengthenings of control of forecasting and execution of the income and expenses, and also enhancement of management in this sphere and increases in transparency, the Cabinet of Ministers of the Azerbaijan Republic decides:

1. Approve "The list of large state-owned companies on which it is necessary to prepare, approve the profit and loss budget and to carry out execution monitoring" (appendix No. 1).

2. Approve "Procedure for creation of the profit and loss budget of large state-owned companies" (appendix No. 2).

3. Approve "Procedure for carrying out monitoring of execution of profit and loss budgets of large state-owned companies" (appendix No. 3).

4. Create the Commission on profit and loss budgets of large state-owned companies in the following structure:

Commission chairman

First Deputy Prime Minister of the Azerbaijan Republic

Members of the commission:

Minister of Economic Affairs of the Azerbaijan Republic

Minister of Finance of the Azerbaijan Republic

Minister of taxes of the Azerbaijan Republic

Chairman of the Central Bank of the Azerbaijan Republic.

5. For the purpose of the organization of the current work of the Commission to create the Secretariat of the Commission and to charge implementation of functions of the Secretariat to the Ministry of Finance of the Azerbaijan Republic.

6. Determine that:

6.1. large state-owned companies represent to the Secretariat of the Commission initial drafts of profit and loss budgets and explanation on each predicted indicator the next year till August 1 annually;

6.1-1. The secretariat of the Commission represents preliminary drafts of estimates and information provided in Item 6.1 of this Resolution, to members of the commission on electronic and paper carriers for the conclusions and introduction of offers;

6.1-2. Members of the commission represent the conclusions and project proposals to the Secretariat of the Commission, provided according to Item 6.1-1 of this Resolution within 15 days;

6.2. The secretariat of the Commission on the basis of the provided conclusions and offers performs project evaluation and in case of need makes the relevant amendments, returns the specified projects to large state-owned companies till September 25 annually;

6.3. Large state-owned companies, represent projects reviewed taking into account the corresponding conclusions by results of assessment which is carried out according to Item 6.2 of this Resolution of profit and loss budgets in the Secretariat of the Commission till October 15;

6.3-1. The secretariat of the Commission represents to the Commission the final draft of the profit and loss budget of large state-owned companies the next year on electronic and papers, will organize their discussion in the Commission;

6.4. The commission approves profit and loss budgets of large state-owned companies till December 25 annually;

6.4-1. If in the state capital investments (investment expenses) of the government budget of the Azerbaijan Republic capital investments in large state-owned companies are provided, the specified investment amounts are reflected the Secretariat of the Commission in the corresponding Items of the Sections "Cash Flow From Activities for Financing" and "Cash Flow from Investing Activities" of the profit and loss budget of large state-owned companies, estimates affirms the Commission chairman repeatedly;

6.5. Large state-owned companies provide to members of the commission and the Secretariat the report on quarter execution of the approved profit and loss budget on the accruing result to the 15th of the quarter of month following later on paper and electronic media;

6.5-1. If in quarter execution of the profit and loss budget large state-owned companies allow variation from the predicted indicators more than for 10 percent, they provide the corresponding explanation for the Secretariat of the Commission about reasons for rejection and indicators reflecting them;

6.5-2. The secretariat of the Commission prepares the corresponding certificate of quarterly execution of the approved estimates of large state-owned companies and represents them to members of the commission on electronic and paper carriers;

6.5-3. Members of the commission represent to the Secretariat of the Commission the conclusions and offers on the reference provided according to Item 6.5-2 of this Resolution within 7 working days, and also the offer on large state-owned companies which quarterly execution of estimates needs to be discussed in the Commission;

6.5-4. The secretariat of the Commission will organize discussion in the Commission of quarterly execution of profit and loss budgets of large state-owned companies which list is established based on the conclusions and proposals of members of the commission and approved with the commission chairman to the 30th following after every quarter. The secretariat of the Commission makes offers on elimination of variations in quarterly execution of estimates of large state-owned companies which discussion is not considered necessary with carrying out discussions with the assistance of representatives of the organizations to whom members of the commission are provided;

6.6. The commission in six-months time carries out the analysis, assessment and monitoring of condition of annual execution of the profit and loss budget and within a month after the specified term prepares the certificate of it and represents it to the President of the Azerbaijan Republic;

6.7. after approval of profit and loss budgets changes in coordination with the Commission can be made to the income and expenses of large state-owned companies;

6.7-1. In case of variation more than for 20% of the predicted indicator in general receipts from operating activiies following the results of condition of execution of the profit and loss budget of large state-owned companies on the first half of the year of the accounting period, the profit and loss budget of the specified companies are reviewed.

7. Repeal the resolution of the Cabinet of Ministers of the Azerbaijan Republic "About profit and loss budgets of large state taxpayers" of June 9, 2005 No. 102.

Appendix №1

Approved by the Resolution of the Cabinet of Ministers of the Azerbaijan Republic of December 30, 2016, No. 534

The list of large state-owned companies on which it is necessary to prepare, approve the profit and loss budget and to carry out execution monitoring

1. State Oil Company of Azerbaijan Republic.

2. Azerenerzhi open joint stock company.

3. Azerbaijan Hava Yollary private company.

4. Azerbaijani Railroads private company.

5. Azersu open joint stock company.

6. Azerishig open joint stock company.

7. Azerbaijani Caspian Shipping Company private company

8. Baku Subway private company.

9. "Melioration and Water Economy of Azerbaijan" open joint stock company.

10. Ceased to be valid

10-1. Azerkosmos open joint stock company.

11. Subordinated organizations of the Ministry of transport, communication and high technologies of the Azerbaijan Republic (Aztelekom limited liability company, "Baku International Sea Trade Port" Private company, Azerpocht Limited liability company and Baku Telephone Communication Limited liability company).

Approved by the Resolution of the Cabinet of Ministers of the Azerbaijan Republic of July 20, 2017, No. 300

Appendix № 2

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