Shareholders of «Uzauto Motors Powertrain» JSC at an extraordinary meeting on October 7 approved auditors to verify financial statements for the year.

Who and how much will audit

  • Ernst & Young — audit under international financial reporting standards, maximum service cost 1.12 billion sums including VAT;
  • HLB Tashkent — audit under national accounting standards, maximum cost 33.6 million sums including VAT.

Both organizations were selected following competitive procedures through a special information portal. The decision was made unanimously with 100% quorum.

The price difference is explained by the scope of work

The thirty-three-fold difference between the two contracts appears significant but has clear justification.

Auditing under IFRS requires transforming national statements into international format, valuing assets at fair value, disclosing related parties and consolidation — a labor-intensive process.

Review under national standards confirms compliance with local requirements and is substantially cheaper.

Why the company needs IFRS reporting

National reporting is needed by regulators and tax authorities. International reporting serves external parties: banks providing credit, partners, and potential investors.

Engaging a firm from the «Big Four» typically means the statements are intended for external audiences — creditors or investors requiring assessment by an auditor with international reputation.

Group context

The company is part of an automotive group structure. Its parent entity UzAuto Motors is preparing for privatization: a tender is announced that includes consideration of renewal of the licensing agreement with General Motors.

The state asset management agency denied reports that privatization serves specific investor interests.

Having IFRS-audited statements is a standard requirement when preparing an asset for sale or securities placement.

What investors should watch

Auditor selection is an indirect but useful signal when evaluating an issuer:

  • an international-level auditor indicates the company's orientation toward external financing;
  • transition from a major audit firm to a less known one sometimes precedes disclosure issues;
  • audit cost indirectly reflects business scale and complexity.

Issuer statements are published on the Unified Corporate Information Portal. It makes sense to compare their data with market valuation — stock prices of traded companies can be tracked using exchange data.

This material is informational in nature and is not investment advice.