SUSTAINABILITY REPORT 2015-2016 the Detsky Mir Group 1 Table of Contents

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SUSTAINABILITY REPORT 2015-2016 the Detsky Mir Group 1 Table of Contents SUSTAINABILITY REPORT 2015-2016 The Detsky Mir Group 1 Table of Contents Message from the CEO .............................................................................................2 5.3. Engagement .....................................................................................................59 1. Confident Leadership ...........................................................................................4 5.4. Motivation and Remuneration System ...........................................................60 1.1. About the Detsky Mir Group ..............................................................................6 5.5. Social Benefits .................................................................................................62 1.2. The Children’s Goods Market in Russia ..........................................................12 5.6. Training and Development ..............................................................................64 1.3. Consolidation Strategy: Key Results ...............................................................16 5.7. Labour Safety ...................................................................................................66 1.4. Record of Achievements .................................................................................20 6. Caring for the Future ..........................................................................................68 2. Sustainable Development ..................................................................................22 6.1 Charity ...............................................................................................................70 2.1. Our Approach to Sustainable Development and Interaction 6.2 Ecological Responsibility .................................................................................77 with Stakeholders ............................................................................................24 2.2. Strategy of Corporate Social Responsibility...................................................27 Glossary ......................................................................................................................80 List of Abbreviations .......................................................................................................80 3. For Children and Their Parents .........................................................................30 Information About the Report .............................................................................................81 3.1. Safety of Products ...........................................................................................32 GRI G4 Context Index .........................................................................................................................................82 3.2. Customer-oriented Service ..............................................................................35 Opinion on the Independent Non-Financial Approval of the Report................................................86 Contacts ......................................................................................................................88 3.3. Online Store ......................................................................................................40 4. Responsible Supply Chain .................................................................................42 4.1. Cooperation with Suppliers .............................................................................44 4.2. Procurement Management .............................................................................47 4.3. Information Technology ..................................................................................52 5. Decent Work ........................................................................................................54 5.1. HR Management ..............................................................................................56 5.2. Our Employees .................................................................................................57 2 Sustainability Report 2015–2016 The Detsky Mir Group 3 Message from the CEO Dear partners, continue our expanding business at remains a stable source of budget and encouraging a bigger number of colleagues and friends! the current fast pace. income. The total amount of taxes employees to take part in volunteer and fees paid by Detsky Mir in 2016 activities over the coming years. In 2015 and 2016, the Detsky Mir The development and improvement comprised RUB 4.1 billion. Group strengthened its leading market of a client-oriented business model In 2017, Detsky Mir will celebrate its positions and enhanced the efficiency remains our top priority. We adhere to By taking part in the Development 70th anniversary – an age when our of its business processes. The financial the omnichannel approach, integrating Strategy for the Children’s Goods aspirations match our possibilities. results for the year 2016 were the all platforms and devices that the Industry by 2020 approved by The Company’s projects are ambitious: best in the in the Company’s history. customer uses to interact with the the Government of the Russian we plan to continue the dynamic Sustainability report 2015—2016. Company. Detsky Mir’s online store is Federation, we offer a wide range development of Detsky Mir’s chain a vital component of this approach. of products produced by Russian stores in Russia and Kazakhstan, to More than 200 new Detsky Mir and ELC We consider this vector to be highly manufacturers in Detsky Mir stores retain the current pace of development stores have been opened over the last prospective and plan to actively and thus contribute to the increase of and increase it a to a bigger amount two years, and by the end of 2016, we develop it. The option of picking up domestic product sales. of sales outlets in the Moscow Region, have a total of 525 stores. We entered online orders at retail supermarkets, Saint-Petersburg and in cities with a retail markets in Chechnya, Ingushetia launched in 2015, has become one of We do the utmost to provide our high potential for business growth and and Dagestan, and proceeded with the key drivers of online store sales employees with the most comfortable a population exceeding 50 thousand implementing our development growth, which has ensured our leading working environment, as well as people. In the mid-term perspective, we programme in Kazakhstan. position in the children’s goods online opportunities for training and career plan to open at least 250 stores. sales segment in 2016. development. The Detsky Mir Group’s Following the provisions of the headcount comprises more than The Company’s high investment Detsky Mir Group’s development The efficient management of business 10 thousand employees. Over the attractiveness draws the attention of strategy, in 2015–2016 our key goal processes allows the Company to course of two years, we have provided potential Russian and foreign investors; was to increase the market share adapt to the economic situation in approximately 5 thousand people with this trend is supported by the fact that while retaining the level of financial a confident and timely manner. The new employment opportunities. in December 2015, 23.1% of PJSC and economic activity. We have deployment of new IT solutions, Detsky Mir shares were purchased by successfully completed all of the tasks such as a SAP platform, has enabled Detsky Mir’s charity foundation the Russia-China Investment Fund. set by shareholders. The Group’s sales the Company to automate business coordinates the Company’s complex In 2017, the Company will continue comprised RUB 60.5 billion (+33,2%) in processes, reduce costs and enhance social activity; its priority is to help communicating with potential investors. 2015, and in 2016 to RUB 79.5 billion labour productivity. By enhancing our children in difficult life situations. (+31,4%). According to Ipsos Comcon, operating efficiency, we have made The foundation invested RUB 287 We are aimed at providing our the Company’s share on the children’s our business model much more million into charity projects for shareholders with a high income goods market grew from 10% in 2014 competitive. implementation in 2015–2016, with and keeping them proud of their to 17% in 2016. the majority of this amount raised investments, thus sharing in the As the absolute leader among Russian from the funds attracted. Company’s success. In 2015, we opened the largest retailers of children’s goods, the Detsky logistics centre for the children’s Mir Group fully understands its liability The Corporate Social Responsibility goods segment in the Moscow region, to the state and society. In the present Policy of the Detsky Mir Group was with a total area of 70 thousand challenging circumstances both for developed and adopted in 2016; it is Vladimir Chirakhov, square metres that will allow us to businesses and the state, the Company aimed at increasing charity scales CEO of PJSC Detsky Mir 4 Sustainability Report 2015–2016 The Detsky Mir Group 5 1⁄ Confident Leadership Our 70-year history and modern business approaches allow the Detsky Mir Group to win leading positions on the children’s goods market 6 Sustainability Report 2015–2016 The Detsky Mir Group 7 1.1. About the Detsky Mir Group The Detsky Mir Group is the largest retailer of children’s In 2015, the Company continued to implement the development goods in Russia and Kazakhstan, uniting the Detsky Mir programme in Kazakhstan;
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