Dear investors,

Thank you for your interest in Etalon Group. With a successful track record that spans over 30 years, Etalon Group is one of Russia’s leading largest development and construction companies. The Company today focuses on residential development in the mid-market segment in Russia’s two most lucrative markets of Moscow and St Petersburg, and we have delivered 7 million sqm since our inception.

Chairman of the Board of Directors

An established player in attractive markets

Etalon Group operates in the Moscow and St Petersburg residential real estate markets and continues to increase the share of higher-margin business-class projects in its portfolio. We are a well-established player in these two cities, which are Russia’s most affluent and sustainable real estate markets. Having been around for over 30 years, Etalon Group has delivered more than 7 million sqm of real estate during that time.

A responsible and sustainable business

Throughout its long history, Etalon Group has earned a reputation as one of Russia’s soundest and most reliable developers. Through challenging macro conditions, the Company has consistently delivered on its promises to customers. Our response to the COVID-19 pandemic has shown that, even as we transform Etalon Group and adapt to changing market conditions, we remain committed to delivering value for all our stakeholders. While taking measures to protect our employees and customers in response to the COVID-19 pandemic, we have continued not only to deliver projects on schedule but also to implement strategic initiatives aimed at unlocking Etalon Group’s considerable potential in the years ahead.

Strategic digital transformation

Changes in consumer behaviour since the start of the COVID-19 pandemic in early 2020 have accelerated elements of the digital and technological transformation of Etalon Group’s business that were already under way as part of our long-term strategy. For example, we were among the first in our sector in Russia to leverage new sales technologies such as virtual reality tours, remote mortgage approval and online sales in order to reach customers during a period of reduced mobility.

In addition to online sales, digital technologies will play a key role across the consumer-facing part of our business, primarily through the development of an ecosystem that encompasses a wide range of interactions with potential buyers and owners of Etalon Group apartments. For instance, the ZIL-Yug project in Moscow is due to become a comfortable and modern district with easy access to a full range of convenient local services available to residents online.

In parallel to the consumer-oriented technological transformation, we are exploring new construction methods, further improving safety monitoring systems and increasing efficiency in building design through the use of a standardised design system based on building information modelling.

Evolving corporate governance

The transformation of our business has also been reflected in Etalon Group’s corporate governance. The Board is constantly seeking ways to further improve corporate governance at the company with steps like transforming the Investor Relations and Information Disclosure Committee and bringing the Policy on Remuneration and Compensation Payable to Members of the Board of Directors in line with best practice by limiting remuneration to only independent non-executive directors. These are just some examples of the ways we are advancing the work of the Board of Directors in the interests of all stakeholders.

In addition to refining corporate governance practices, Etalon Group has a highly talented management team that the Board believes is well placed to support the Company’s strategic development. One of our priorities is to maintain continuity in Etalon Group’s strong corporate culture, its highly capable team and the corporate governance principles that investors have come to expect from the Company.

Enhancing our focus on ESG

From the Board of Directors on down, we are increasingly focusing on sustainability and ESG issues, in line with the global trend towards more structured and detailed reporting on these issues. While Etalon Group, like many companies, has a long history of implementing programmes in areas ranging from building social infrastructure to occupational health and safety and personnel development, we have begun the process of bringing our reporting on these issues in line with GRI standards and reflecting on what we do in terms of the United Nations Sustainable Development Goals. Together with the Board, I support management’s efforts to improve the Group’s reporting on its sustainability performance.

All of this underscores the fact that Etalon Group is a strong company with a long history of adapting to changing market situations and successfully navigating difficult times. I have every confidence that Etalon Group’s future is bright and that together we will deliver significant growth in our business and in value for our shareholders.