Report of the Board of directors on results of CDR (CJSC) in 2006

25.06.2007

After stagnation at the primary market of real estate in 2005, 2006 showed rapid growth of demand for housing and prices for it. During the accounting period, CDR (CJSC) acting as an agent for sales of real estate erected by "Etalon-LenSpetsSMU" holding attracted by 45% of clients more in comparison with 2005, at that the prices rose by more than 100%. Consequently, the proceeds of CDR (CJSC) in 2006 increased by almost 70% compared to the past year, and the net profit - by more than 50%.

In the end of July, 2006, CDR (CJSC) allocated the second bonded loan at the public market for the amount of 1.5 billion rubles. As a result of the auction at the allocation the rate for the first coupon was fixed at 11.69%, of the second - 11.44%, of the third - 11.19%, and that of the fourth - 10.94%. As at the date of preparation of the Report of the Board of directors, the bonds of the second issued were traded at the secondary market for 10% per annum to the offer. The moneys from the allocation were directed for financing a number of objects of LenSpetsSMU. Thus, CDR (CJSC) has reinforced its positions in the Holding as an investment company.

Against the background of success in the operational, financial and investment activities, the considerable improvements of the management accounts infrastructure were a success thus improving the manageability of the company.

The work of the Department for management and operation of real estate of CDR (CJSC) was considerably corrected. On the basis of the Department for investments there was developed a concept and a contact center created which allowed for optimizing work with clients of CDR (CJSC).

The work of the Group for hypothec should also be admitted; providing for work of LenSpetsSMU with six banks in the field of hypothecary crediting joint programs at the primary market of real estate this group executed over 200 transactions for purchasing on credit apartments from LenSpetsSMU.

In general, the Board of directors supposes that the work of CDR (CJSC) in 2006 should be considered successful. In relation to the financial results in the end of 2006 the Board of directors recommends to the General meeting of shareholders to distribute the profits as follows:

  • the amount of dividend 491 170.00 rubles on one share, 49 117 000.00 rubles in total, the form of payment - monetary assets, dividend payment term - not later than 60 days after the date of adopting the resolution on dividend payment. The list of persons entitled to receive dividends from CDR (CJSC) is to be drawn up as at the date of making up the list of persons having been entitled to attend the annual General meeting of shareholders of CDR (CJSC),
  • 9 800 000.00 rubles to be directed for financial incentives of employees and other social payments,
  • not to distribute the retaining profits.