No.308 FAS Russia's Order of 13.08.2008 "On Approving the Form of a Business-Plan for a Business Entity of Strategic Importance to Be Presented by a Foreign Investor..."

No.308 FAS Russia's Order of 13.08.2008 «On Approving the Form of a Business-Plan for a Business Entity of Strategic Importance to Be Presented by a Foreign Investor under Clause 10 Part 2 Article 8 of No.57-FZ Federal Law of 29.04.2008 «Procedures for Foreign Investments in the Business Entities of Strategic Importance for National Defense and State Security»

To enforce Clause 10 Part 2 Article 8 of No.57-FZ Federal Law of 29.04.2008 «Procedures for Foreign Investments in the Business Entities of Strategic Importance for National Defense and State Security»,

I hereby order:

1. To approve the form of a business-plan for a business entity of strategic importance, according to the types of activities specified in Article 6 of No.57-FZ Federal Law of 29.04.2008 «Procedures for Foreign Investments in the Business Entities of Strategic Importance for National Defense and State Security» (see the Appendix).

2. I shall personally supervise the execution of the Order. 

I. Artemyev

Head of FAS Russia

Appendix to the No.308 FAS Russia's Order of 13.08.2008

THE FORM OF A BUSINESS PLAN 

for a business entity of strategic importance to be presented by a foreign investor under Clause 10 Part 2 Article 8 of No.57-FZ Federal Law of 29.04.2008 «Procedures for Foreign Investments in the Business Entities of Strategic Importance for National Defense and State Security». 

The draft business-plan must be drawn up according to the type (types) of activities specified in Article 6 of No.57-FZ Federal Law of 29.04.2008 «Procedures for Foreign Investments in the Business Entities of Strategic Importance for National Defense and State Security» (further on referred to as the type (types) of activities) and must characterize the development strategy according to the type (types) of activities of a business entity (further on referred to as the draft).

The Title Page must contain:

- information on the form of business ownership, place of the official registration 

and mailing address of the business entity;

- full and short name of the business entity;

- full and short project title;

- date and place of project development;

- project approval by the authorized official(s) of the business entity;

- the seal of the business entity.


1. Introduction 

1.1. General description of the project, its strategic aims and objectives. 

1.2. Type(s) of activities effectively carried out by the business entity.

1.3. License(s) granted to the business entity for the type(s) of activities exercised by the business entity.

1.4. Type(s) of activities planned by the business entity.

1.5. Organizational structure of project management.

1.6. Estimates of the overall project value, project stages and implementation period, required investments, and the recoupment period. 

2. Industry analysis 

2.1. Evaluation of the current state as well as prospective development of the industry that covers the type(s) of activities in question.

2.2. Anticipated growth of the relevant market of the goods (works, services). 

2.3. Estimated shares on the relevant goods (works, services) markets before and after implementing the project.

2.4. Estimated capacity of the market of relevant goods (works, services), in million Rubles, specifying the methods of calculations and sources. 

2.5. General characteristics of the competitive environment. The main current and potential competitors, indicating their possible shares of the relevant goods markets and information sources. 

2.6. Current and potential strategic partners and counteragents. Current contracts and relationship with the manufacturers of similar products in Russia and abroad. 

3. Description of the produced and (or) distributed goods (works, services) in accordance with the type(s) of activities.

3.1. Main characteristics of the goods (works, services), as well as their codes under the Russian Classification of Products (OKP), the National Classifier of Economic Activities (OKPD), the Classifier for Foreign Economic Activity (TN VED), the General Classifier of Economic Activities (OKVED).

3.1.1. Product functionalities, examples of usage, technological effectiveness, universality.

3.1.2. Compliance with the state standards, the requirements for patent and license protection, the quality control requirements.

3.1.3. Current stage of product development (concept, detailed design, industrial prototype, large-scale manufacturing, etc.)

3.2. Information on the scope and share of supplies of the products manufactured under the state procurement (for the defense needs) and government's defense order in the overall output in the previous and current calendar year (if any).

4. Marketing and sales of the goods (works, services) for the type(s) of activities 

4.1. General marketing strategy.

4.2. Pricing. Substantiation of prices for the goods (works, services) - principal items, taking into consideration the estimated level of sales profitability and production cost analysis.

4.3. Selling efforts for the goods (works, services). Description of the sales & distribution system, specifying the organizations involved in the selling the goods (works, services); the sales targets. 

4.4. After-sales service (including information about the after-sales contracts (agreements) and organizations with which such contracts (agreements) are concluded). 

4.5. Main current and potential consumers of the goods (works, services).

4.6. Joint production, research-and-engineering and other projects carried out by the parties to the transaction in question. 

4.7. Quality management system for the produced (distributed) goods (works, services).

5. Production plan for the type(s) of activities under the project

5.1. The adopted programme for production and sales of the goods (works, services), anticipated schedule for providing the goods (works, services)).

5.2. Description of the pattern of production cooperation.

5.3. Production capacities and their development. Information on the mobilization capacities, their share in the overall production capacities and utilization rate for the output of the main products. 

5.4. Description of the facilities (areas) planned for arranging and developing production activities.

5.5. Planned additional employment opportunities. 

5.6. Ecological effects of the project implementation, environment impact audit. 

6. Financial plan 

6.1. Analysis of the current financial status of the business entity. Calculations of the liquidity index, financial soundness, business activity, property status, profitability, and market value of the assets at the last closing date prior to submitting the petition. 

6.2. Investment programme.

6.3. Balance sheet, profit & loss statement at the last closing date prior to submitting the petition.

6.4. Calculations of the net profit of the business entity, specifying the size and the share(s) of the net profit for the type(s) of activities in the overall profit in the last accounting year (in million Rubles, %). 

6.5. Project financing, estimated sources and models of financing (broken down by the periods).

6.6. Estimated additional investments in the project (if using borrowed funds) enclosing copies of the relevant contracts with credit or other organizations for providing the funds. 

6.7. Cash flow forecast for the period of project implementation (presented as a Table).

7. Risk assessment of the project according to the type(s) of activities 

7.1. Technological risks.

7.2. Organizational and management risks.

7.3. Risks of logistic and maintenance support.

7.4. Financial risks.

7.5. Economic risks.

7.6 Social risks.

8. Estimated efficiency 

8.1. Projected sales and revenue in physical and value terms (million Rubles).

8.2. Cost structure analysis for the goods (works, services).

8.3. Profit before tax and interests, net profit (million Rubles).

8.4. Internal rate of return (IRR).

8.5. Net present value (NPV).

8.6. Calculations of the recoupment period for the project investments.

8.7. Sensitivity analysis for changing the key market factors, depending on the type(s) of activities; the break-even point. 

9. Appendix

9.1. The Appendix includes the documents confirming and clarifying the information presented in the business plan; and other documents, which, in the petitioner's opinion, are essential for its social and economic-and-legal evaluation, taking into consideration the industry specifics and the type(s) of activities; as well as the methods of calculating the indices listed in Part 6 and Part 8.