• After collapse of the Soviet Union The State Enterprises were operating in different form and were managed by different line Ministries such as Ministry of Economy, Ministry of Agriculture, Ministry of Transport and Communication, Ministry of State Property Management.

• In the end of 1990s was established law which regulated form of state owned enterprises and they were defined only as LTD. or JSC.

• In 2003 The LEPL “Enterprises Management Agency” was created and all State Enterprises were transferred under its management.

• The LEPL “Enterprises Management Agency” conducts its activity according to the Georgian Low “On Entrepreneurship”

• Public enterprises are included in the strategy of the national development of the following sectors such as transportation (for example: Ltd Georgian Railway, Ltd Marabda Kartsakhi Railway, Ltd Union of Georgian Airports, Ltd Georgian Air Navigation) Healthcare, Energetic, Agriculture, Communication (Ltd Georgian post)sectors.

• Strategic Goals of PSEs are determined by the Government of Georgia together with the line Ministries and by the Commissions created with the participation of corresponding Ministries such as Commission for discussion proposals concerning distribution and use of net income of the enterprises created by the state share participation and Commission for working out the Transportation and Communication Sector Development Policy of Georgia.

• We are closely cooperating with the private sector and implementing mutual projects in fields of Transportation, Healthcare and Agriculture.

• According to the Georgian Constitution Ministry of Economic and Sustainable Development of Georgia is determined as the successor of the property of the Ministries of Transport, Construction, Communication and State Property Management and LEPL “Enterprise management Agency” implements the rights of partner (share holder) within the State enterprises.

• State ownership functions are exercised by the Privatization Department, State property Management Department of the Ministry of Economic and Sustainable development of Georgia and by the LEPL “Enterprise management Agency” which conducts its activity according to the Georgian Low on Entrepreneurship and its main Function is implementation the rights of partner (share holder) within the enterprises created by the state share participation, except the rights of privatization or disposal of shares and stocks being under state ownership.

• For evaluation of PSEs we are using different types of methodologies such as Qualitative and Quantitative researches and the data are compared to the previous years results which gives us more or less exact picture to define the successive enterprise. According to this methodology several month ago in different nominations was selected 12 companies representing the different fields of activities.

• In case of electing the Board and Directors of the enterprises we mainly

are selecting them according to their experience and education also in some cases we are using examination period.

• Registering of the enterprises and their assets;

• Classification of the enterprises in several basic categories;

• Adoption corresponding decisions toward the enterprises divided by the categories

Registering of the enterprises and their assets

• comparison of Agency’s information with the information of the Business Register and territorial units of Ministry of Economic and Sustainable Development of Georgia;

• To require the renewed documentations from enterprises is necessary (Balance, profit-loss list) for analyzing profitability and solvency of enterprises also ascertain their liquidity (will give us the opportunity to classify enterprises by basic categories).

• Registration the property of the enterprises and Creation of exact real estate data ; (will give us possibility to make corresponding decisions towards the enterprises classified by categories)

Financial analysis and determining the future plans

Defining the budget of the enterprise and

appointing financial manager

Enterprises Management ModelAnalyzing and Classification of Enterprises, their

Activities and Financial Reports

Enterprises being vitally important

Enterprises having hard

financial statement, having

no prospects

Service sphere, regional

enterprises

Perspective Enterprises

Unprofitable enterprises or

enterprises with small profit

I II III IV V VI

Profitable

Implementation of corporate Governance

System

Liquidation, merging or

insolvency case must be opened

Privatization of the property

will remain under our management

transferring under the management of local self government units

Restructuring, privatization of

the surplus property

Offer to investors by specific conditions

Changing the management or the system of managing of enterprises

Working out appropriate

business plan

Special circumstances –

enterprises which real estate is used

by refugees

NNon profitable

key statistic figures about state owned enterprises

• Currently we manage 1136 state enterprises, among them 317 enterprises are important (will remain under the state management) and their revenues contribute 160 250 623 Gel. Rest – 819 enterprises are either in liquidation or in bankruptcy process, some of them need to be merged or will be transferred under the management of local government.

• In 1136 enterprises 42 757 people are employed.

• Dividend of 2010 contribute 55 582 856 Gel.

Dividends of the Year 2008 - 2010