Annual Report 2019 Public Joint-Stock Company Lsr Group

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ANNUAL REPORT 2019 PUBLIC JOINT-STOCK COMPANY LSR GROUP APPROVED BY: PRELIMINARILY APPROVED BY: GENERAL MEETING OF SHAREHOLDERS THE BOARD OF DIRECTORS PJSC LSR GROUP OF PJSC LSR GROUP “.........” ............................................ 2020 26 March 2020 MINUTES №......... MINUTES № 5/2020 dated “.........” ............................... 2020 dated 26 March 2020 ANNUAL REPORT FOR 2019 A.YU. MOLCHANOV CHIEF EXECUTIVE OFFICER PJSC LSR GROUP YU.N. RESHETNIKOVA CHIEF ACCOUNTANT PJSC LSR GROUP CONTENTS “Zilart”, Moscow “Granite-Kuznechnoye” Quarry LSR GROUP STRATEGIC REPORT OPERATING SUSTAINABILITY CORPORATE ANNEXES Key Figures and Business Model ������������������������22 AND FINANCIAL Strategy and Sustainability GOVERNANCE Annex 1� List of Major Performance in 2019 ����������������� 6 Management �����������������������������64 Transactions in 2019 ��������������������� 102 Strategy ���������������������������������������24 PERFORMANCE Corporate Governance Statement from the Chairman Facilitating the Development Management ����������������������������� 76 Annex 2� List of Transactions LSR Group Development Operating Results ���������������������40 of the Board of Directors �����������8 of Sustainable Cities ����������������66 recognised as interested party Prospects ������������������������������������26 Financial Results ����������������������� 44 Share Capital ����������������������������� 97 transactions ���������������������������������� 102 Statement from the Chief Occupational Health Market Overview ����������������������28 Real Estate Portfolio ����������������46 Annex 3� Report on observing Executive Officer ��������������������������� 10 and Safety ����������������������������������68 principles and recommendations Risk Management �������������������� 34 Organisational Structure ���������12 Project Portfolio ������������������������48 HR Management �����������������������69 of the Corporate Governance Code ������������������������ 106 Geographical Reach ����������������� 14 Ethical Business Conduct Annex 4� Financial Statements ���124 and Countering Corruption ����� 71 Brief History of LSR Group ������16 Annex 5� List of the Environmental Protection ������� 72 Key Events in 2019 ��������������������18 abbreviations ������������������������������ 208 4 LSR GROUP │ Annual Report 2019 Annual Report 2019 │ LSR GROUP 5 LSR GROUP STRATEGIC OPERATING AND FINANCIAL SUSTAINABILITY CORPORATE ANNEXES REPORT PERFORMANCE GOVERNANCE KEY FIGURES AND PERFORMANCE IN 2019 FINANCIAL RESULTS SUSTAINABLE DEVELOPMENT 110.4 7.5 21.0 19% 8 0 0.51 BILLION RUB BILLION RUB BILLION RUB EBITDA MARGIN ON-SITE ACCIDENTS FATAL ACCIDENTS LTIFR AMONG EMPLOYEES AMONG EMPLOYEES AMONG EMPLOYEES REVENUE NET PROFIT ADJUSTED EBITDA (2018: 10) (2018: 0) (2018: 0.54) (2018: 146.4 BILLION) (2018: 16.2 BILLION) OPERATING RESULTS REAL-ESTATE AND CONSTRUCTION 9,814 4,468 407 PEOPLE PEOPLE MILLION RUB AVERAGE NUMBER NUMBER OF EMPLOYEES WHO INVESTMENTS IN CHARITABLE 817.4 84.2 112.4 OF EMPLOYEES COMPLETED TRAINING AND PROJECTS THOUSAND SQM BILLION RUB THOUSAND RUB (2018: 11,677) UPSKILLING PROGRAMMES (2018: 670 MILLION) SALES CONTRACTS VALUE OF CONTRACTS PRICE PER SQM (2018: 3,611) (2018: 1,001.8 THOUSAND) (2018: 92.7 BILLION) (2018: 98.1 THOUSAND) BUILDING MATERIALS 7,416 8,240 1,143 305 1,413 0 0 164 ACCIDENTS WITH NUMBER THOUSAND TONS THOUSAND CBM THOUSAND CBM THOUSAND CBM MILLION UNITS THOUSAND CBM ENVIRONMENTAL OF CORRUPTION CASES OF СО2–EQUIVALENT CRUSHED SAND READY-MIXED BRICKS AERATED IMPACT2 (2018: 0) GRANITE (2018: CONCRETE (2018: 300 MILLION) CONCRETE DIRECT GREENHOUSE (2018: 0) 2 (2018: 7,540 THOUSAND) 10,699 THOUSAND) (2018: 1,135 THOUSAND) (2018: 1,418 THOUSAND) GAS EMISSIONS CASH FLOWS 24.7 2.0 -3.6 BILLION RUB BILLION RUB BILLION RUB OPERATING CASH FLOW INVESTMENT FINANCIAL BEFORE INCOME TAX (2018: 1.0 BILLION) (2018: 4.5 BILLION) 1 1 Including cash in escrow accounts received during AND INTEREST PAID the reporting period. 2 (2018:30.2 BILLION) Within the Building Materials segment. 6 LSR GROUP │ Annual Report 2019 Annual Report 2019 │ LSR GROUP 7 LSR GROUP STRATEGIC OPERATING AND FINANCIAL SUSTAINABILITY CORPORATE ANNEXES REPORT PERFORMANCE GOVERNANCE STATEMENT FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS Dear shareholders, Developments on the mortgage bond market should lead As per global best practice, the majority of our seven 2019 was a turning point for the construction industry. to a further decline in interest rates. According to DOM.RF, Board of Directors members are independent directors. Russian real estate developers will now need to use 2019 was a record year for the market across a number of Furthermore, we received yet another Director of the Year escrow accounts in order to sell their projects launched metrics. For example, a record RUB 296.9 billion of bonds National Award in 2019, which once again confirms the after 1 July 2019. Nonetheless, to maintain current were issued (up 103% year-on-year) with RUB 555.7 highest level of corporate governance at PJSC LSR Group. construction volumes and minimise the number of billion of bonds outstanding (up 41.6% year-on-year). This time, it was Vitaly Podolsky, member of the Board of Directors, who was named Best Independent Director, incomplete projects on the market, the Government has Market consolidation started to take place as high- while Elena Chistyakova was rated Top-25 best Corporate defined a set of criteria that, if met, allows for residential risk players have slowly begun exiting the real estate Secretary. projects to be completed after 1 July 2019 in line with development market, not being able to secure bank previous legislation, thereby bypassing the new rules. funding. Consequently, the likelihood of defrauded real I am delighted to report that in October 2019, Fitch These criteria, outlined in the Government’s Resolution, estate buyers (co-investors) will be significantly reduced, Ratings upgraded LSR Group’s Long-Term Foreign- require that any apartment building under construction thus improving consumer perception of the entire Currency Issuer Default Rating (IDR) to ‘B+’, outlook must be at least 30% complete, while the total amount construction industry. DOM.RF estimates that the Top 10 Stable. of shared equity agreements for any construction real estate developers have already consolidated about We feel optimistic about the future while continuing to project must cover at least 10% of its total residential 20% of the market for housing under construction, with execute our strategy and maintain our leading positions and non-residential space. However, as a systematically LSR Group being the second largest developer. in key regions. With a sound financial position, balanced important enterprise, LSR Group is required to meet the In line with the strategy to improve and optimise its asset portfolio, and a team of experienced professionals completeness criteria set at only 6%. For this reason, asset portfolio, in 2019 LSR Group sold its share in the we are committed to achieving success in 2020. I hope a significant share of our land bank can be developed ZIL-Yug development project and completed the sale that 2020 will be a successful year for you too! under the old rules, allowing for a smooth transition of LLC LSR. Reinforced Concrete in St. Petersburg, thus period to project financing. continuing to support the effectiveness of its business Mortgage loans remained a key driver in the real estate model. Our main priorities are to grow our real estate Dmitry Goncharov, development market in 2019. Mortgage interest rates development business and strengthen our presence Chairman of the Board of Directors, declined, following the Bank of Russia’s key rate that was across key regions of operation: Moscow and the Moscow LSR Group consistently lowered throughout the year. Interest rates Region, St. Petersburg and the Leningrad Region, and dropped to 9.0% for mortgages issued in December Yekaterinburg. We reiterate our commitment to our Dmitry Goncharov 2019 (annual average: 9.9%). This means that the 8.7% development strategy and are not planning to enter any Chairman of the Board target outlined in the charter of the Housing and Urban new markets at the present in time. of Directors, Environment national project for 2020 will already Our core business philosophy is not limited to profit LSR Group be met in the first half of 2020. To a large extent, the targets. We are striving to improve our social involvement decline in interest rates is driven by government subsidy while addressing our common infrastructural, programmes, such as, for example, the prevalent Family environmental and social agenda, and we aim to Mortgage programme, which offers loans at 6% interest improve the well-being of every individual and society as rate. In partnership with major banks, LSR Group has a whole. Therefore, alongside operational and financial been successfully selling real estate under this and other performance, we also consider our performance across popular state-support programmes. key areas of sustainable development, such as decent and safe working conditions, ethical conduct and countering corruption, sustainable communities and environmental protection. LSR Group’s management places a particular emphasis on embedding sustainability in its strategy, culture and operations in line with international standards. In 2019 LSR Group became a signatory to the UN Global Compact. Annual Report 2019 │ LSR GROUP 9 LSR GROUP STRATEGIC OPERATING AND FINANCIAL SUSTAINABILITY CORPORATE ANNEXES
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  • Atlas of High Conservation Value Areas, and Analysis of Gaps and Representativeness of the Protected Area Network in Northwest Russia

    Atlas of High Conservation Value Areas, and Analysis of Gaps and Representativeness of the Protected Area Network in Northwest Russia

    Atlas of high conservation value areas, and analysis of gaps and representativeness of the protected area network in northwest Russia Arkhangelsk, Vologda, Leningrad, and Murmansk Regions, Republic of Karelia, and City of St. Petersburg Konstantin Kobyakov and Jevgeni Jakovlev (eds.) Atlas of high conservation value areas, and analysis of gaps and representativeness of the protected area network in northwest Russia Arkhangelsk, Vologda, Leningrad, and Murmansk Regions, Republic of Karelia, and City of St. Petersburg Konstantin Kobyakov and Jevgeni Jakovlev (eds.) The English Revised Edition Helsinki 2013 Finnish Environment Institute Atlas of high conservation value areas, and analysis of gaps and representativeness of the protected area network in northwest Russia: Arkhangelsk, Vologda, Leningrad, and Murmansk Regions, Republic of Karelia, and City of St. Petersburg Konstantin Kobyakov & Jevgeni Jakovlev (eds.) Revised English Edition based on the publication: Sokhranenie tsennykh prirodnykh territoriy Severo-Zapada Rossii. Analiz reprez- entativnosti seti OOPT Arkhangelskoi, Vologodskoi, Leningradskoi i Murmanskoi oblastei, Respubliki Karelii, Sankt-Peterburga/ Kollektiv avtorov. Pod red. Kobyak- ova, K.N. Sankt-Peterburg. 2011. 506 s. W WMV F TTUXF H Q R V P W UP UP! PSW U The English Revised Edition. Helsinki 2013 Editorial board: Tapio Lindholm, Raimo Heikkilä, Anna Kuhmonen & Jyri Mikkola Translated into English and revised by Jevgeni Jakovlev with assistance from Don Welsh. Layout and design of the English Edition by Pirjo Appelgren, Finnish Environment Institute. Editing maps for the English Edition by Jani Huotari & Jevgeni Jakovlev, Finnish En- vironment Institute. Figures: 105; tables: 22; photographs: 88; maps (scale 1: 300 000): 259; 257pp; bibliography: 246. English Edition: © Finnish Environment Institute This publication is also available on the Internet at www.syke.fi/nature/nwrussia.