UVZ CORPORATION: THREE-YEAR IFRS FINANCIAL STATEMENTS

UVZ Group has published its IFRS (International Financial Reporting Standards) consolidated financial statements 2010-2012 for the first time.

The management of the corporation takes it as a main step towards getting ratings from international agencies (Fitch, Moody`s, S&P) in the first quarter, 2014.

It will enhance investment prospects of the corporation and will give access to cheaper financial resources market.

The three-year consolidated financial statements were audited by KMPG – one of the world's largest auditing companies, a member of the "Big Four", along with Deloitte, Ernst & Young and PwC.

OJSC URALVAGONAVOD AND ELECTRO-MOTIVE DIESEL SIGN A MEMORANDUM OF UNDERSTANDING TO CONSIDER OPPORTUNITIES FOR MAINLINE LOCOMOTIVES IN RUSSIA

OJSC NPK UralVagonZavod (UVZ), a leading railway industry manufacturing corporation, has signed a Memorandum of Understanding with Electro-Motive Diesel, Inc. (EMD), a leading manufacturer of diesel-electric locomotives, to examine potential opportunities for the development and build out of mainline locomotives in Russia. Per the MOU, the companies anticipate having demonstration units in Russia for performance and certification testing in 2014.

The MOU also addressed the consideration of a joint engineering team to potentially develop a mainline locomotive model at 4500 BHP using an EMD AC transmission system, EMD 16-710 engine and other EMD service proven components, technologies and designs. EMD and UVZ will also examine adopting a goal to achieve 50 percent local content in Russia for the locomotive build program.

The manufacture of modern, mainline freight locomotives on Russian territory would bring opportunities for incorporating the latest EMD natural gas technologies.

EMD locomotives operate globally on railways in all climate zones, with proven reliability and relatively low lifecycle cost. The companies are working toward signing a definitive agreement in the coming months.

UVZ CORPORATION SUMMED UP THE YEAR

The corporation management held its final meeting with the directors of subsidiaries and affiliates in Moscow, chaired by UVZ CEO Oleg Sienko.

Chief Financial Officer Ruslan Kondrashov reported the expected consolidated receipts of corporation over $2,9 bln. For certain activities the receipts will exceed the plan. For instance, the receipts of "Logistics and Services" branch is $197 mln, that is $60 mln over the plan.

Net profit for the year is expected to exceed $9.1 mln. Thereby the corporation, due to increase of government defense contracts, maintained a positive trend in profitability, despite a significant decline in the rolling stock market both in quantity and price.

The  meeting noted an  important rate of internal cooperation, that indicates formed corporation structure and organized  co-operation between its companies. By the end of 2013 it amounts almost $ 455 mln, whereas five years ago in didn’t exceed $ 30 mln.

During the meeting it was pointed that the corporation strictly fulfills all social obligations stated in collective agreements, including wage growth, which is by the end of 2013 year $1000 on average. Meanwhile, number of employees in 2013 remains at the level of 2012.

The corporation’s main objectives for 2014 were pointed in the report of First Deputy Chief Executive Officer Yury Bodiaev. The planned volume of government defense contracts next year will twice against the 2013 volume. For the division of railway engineering it is planned to produce and sell about 22 000 freight railway cars of all kinds in 2014,  that means not less than 7% increase in sales compared to the current year.

It shows that despite the decline of demand the corporation maintains  the all-time high volume of production of freight railway cars and tanks achieved in the recent years. It was realized partly due to in advanced made decision on establishment and development of the subsidiary railway operator "UVZ –Logistics”.

UVZ also plans to enter new markets in 2014, to increase production of innovative products and line of specialized railway cars, to increase production and sales of trams.

In conclusion, Oleg Sienko, UVZ CEO, noticed that next year is also not expected to be economically easy, but companies of the corporation have everything essential to find new points of increase and keep the dynamical development, based on the achieved positions in the transport and special purpose machinery.

RUSSIA AND VIETNAM FACILITATE COOPERATION

OJSC “RPC “URALVAGONZAVOD” intends to participate in joint construction of a plant for rolling stock assembly in Vietnam.

A Memorandum of Cooperation between Vietnam-Russia Joint Venture Bank and OJSC “Research and Production Corporation “URALVAGONZAVOD” was signed in the presence of the President of the Russian Federation Vladimir Putin and the President of the Socialist Republic of Vietnam Truong Tan Sang on November 12, 2013 in Hanoi, Vietnam. The key point of the Memorandum is facilitating implementation of joint investment projects of UVZ within the territory of Vietnam and bank servicing of these projects by the Vietnam-Russia Joint Venture Bank.

On behalf of the UVZ Corporation the Memorandum has been signed by CEO Mr. Oleg Sienko and on behalf of Vietnam-Russia Joint Venture Bank – CEO Mr. Doan Minh Tien.

UVZ: JOINING EFFORTS WITH KAZAKHSTAN

OJSC “Research and Production Corporation “URALVAGONZAVOD” and JSC “Semey Engineering” (Kazakhstan) have signed a Founders Agreement to establish a joint venture for technical maintenance and repairs of armoured vehicles “UVZ – Semey Engineering.

The agreement has been signed in Yekaterinburg as a part of the anniversary X Trans-Regional Cooperation Forum “Russia-Kazakhstan”. The heads of the two states – Vladimir Putin and Nursultan Nazarbayev have participated in the forum.

JSC “Semey Engineering” is the only facility in Kazakhstan that provides heavy overhaul and modernization of armoured vehicles.

On behalf of the UVZ Corporation the Agreement has been signed by Oleg Sienko, CEO and on behalf of Semey Engineering – by Bakytzhan Seitov, CEO. According to the agreement, there is going to be established a service centre for maintenance, re-equipment and modernization of armoured vehicles and machines within the territory of Kazakhstan. It will supply repair parts, assemblies and subassemblies for armoured vehicles. URALVAGONZAVOD intends to maintain T-72 tanks at this facility.

CEO of JSC “Semey Engineering” Bakytzhan Seitov noted that “our prospective cooperation with Research and Production Corporation “URALVAGONZAVOD” is of high significance for us. It will give us prospects in expanding line of machines that are subject to heavy overhaul and modernization. I am positive that our cooperation will be effective. We will make every effort in order to achieve positive results. This result will develop from instructions of our Governments which we are to fulfil”.

OJSC “Research and Production Corporation “URALVAGONZAVOD” said: “Our role here is defining, because we are the developers of these products. But since the facility will be located within the territory of our partners, we have parity. Each of the parties has objectives, including mutual ones, within the Collective Security Treaty Organization. We owe to help our partners and colleagues increase the defence capabilities of the country. We’ve had a long way to this and we hope that our plans will be put into practice successfully”.