REG - Etalon Group Limited - Etalon Group Board of Directors Meeting Results <Origin Href="QuoteRef">ETLNGq.L</Origin>

EtalonAnnouncement

14/11/2016 07:35

RNS Number : 0662P
Etalon Group Limited
14 November 2016
14 November 2016
Etalon Group Board of Directors Meeting Results
The Board of Directors of Etalon Group Limited ("Etalon Group" or the "Company"), one of Russia's largest and longest-established development and construction companies, held a meeting at the Amathus Hotel Limassol, 75 Amathounta Avenue, 4532 Limassol, Cyprus.
Strategy
The Board of Directors reviewed the Company's strategic plan for 2017-2021 and approved its key principles, which should lead to substantial market share gainswhile improving profitability and cash flows over the next 5 years. The Board tasked management with developing a detailed strategic plan by the middle of January 2017, after which it will be presented to the public.
Motivation programme
The Board of Directors has changed the motivation programme for the top management team in line with the Company's strategic goals for 2017-2021. Starting from 1 January 2017, remuneration for Company leadership will be based on five KPIs: delivery volumes, cash collections, dividend payments, net profit and growth in the Company's market capitalisation. The latter two KPIs will have the most significant role (their weight in overall remuneration is expected to be over 60%). In addition, only 50% of bonuses will be paid out in cash, while the remaining 50% will be paid out in the form of Etalon Group GDRs with long-term limitations on their sale, ensuring even greater alignment of shareholders and management.
Changes to the Board of Directors and Committees
In order to further enhance the Board's supervisory role and strategic expertise, and in line with global best practices in corporate governance, the directors re-elected the Board of Directors and decided to create an Information Disclosure Committee. The new makeup of the Board of Directors and its Committees is listed below:
Board of Directors: 
 Dmitry Zarenkov, Chairman, non-executive director
 Viacheslav Zarenkov, CEO and President of Etalon Group
 Kirill Bagachenko, Deputy CEO and Vice President of Etalon Group
 Dmitry Kashinsky, Vice President of Etalon Group
 Martin Cocker, independent non-executive director
 Boris Svetlichny, independent non-executive director
 Michael Calvey, non-executive director
 Alexey Kalinin, non-executive director
 Charalampos Avgousti, independent non-executive director
 Marios Theodosiou, independent non-executive director
Strategy Committee:
 Dmitry Kashinsky, Committee Chairman, Vice President of Etalon Group
 Viacheslav Zarenkov, CEO and President of Etalon Group
 Dmitry Zarenkov, non-executive director
 Alexey Kalinin, non-executive director
 Kirill Bagachenko, Deputy CEO and Vice President of Etalon Group
 Victor Vasenev, Chief Financial Officer of Etalon Group
 Alexander Tyapin, Investment Director at Baring Vostok funds
Audit ommittee:
 Martin Cocker, Committee Chairman, independent non-executive director
 Boris Svetlichny, independent non-executive director
 Victor Vasenev, Chief Financial Officer of Etalon Group
 Gabbas Kazhimuratov, Chief Financial Officer at Baring Vostok funds
Remuneration and Nomination ommittee:
 Viacheslav Zarenkov, Committee Chairman, CEO and President of Etalon Group
 Alexey Kalinin, non-executive director
 Martin Cocker, independent non-executive director
 Charalampos Avgousti, independent non-executive director
 Dmitry Zarenkov, non-executive director
 Kirill Bagachenko, Deputy CEO and Vice President of Etalon Group
 Michael Calvey, non-executive director
Information Disclosure Committee:
 Kirill Bagachenko, Committee Chairman, Deputy CEO and Vice President of Etalon Group
 Victoria Tsytrina, Chief Legal Officer of Etalon Group
 Ksenia Savchuk, Head of PR of Etalon Group
Re-domicile from Guernsey to Cyprus
At its meeting the Board also discussed moving the Company's domicile from Guernsey to Cyprus. After considering changes to legislation in the countries where Etalon Group operates, and in line with ongoing efforts to strengthen further the Company's corporate governance, as well as to optimise overhead costs, the Board of Directors unanimously voted to recommend that shareholders approve the change in domicile at an extraordinary general meeting of shareholders ("EGM"), which will be convened on 19 December 2016. 
Based on comprehensive legal and tax research, the Board of Directors understands that investors' rights and protections will be unaffected by the change in domicile, that LSE listing rules will continue to apply, and that there will be no impact to Etalon Group's global depositary receipt ("GDR") programme (including no requirement to exchange GDRs).
The Notice of EGM and Form of Proxy will be posted to shareholders, and copies of these documents will be submitted to the National Storage Mechanism at http://www.morningstar.co.uk/uk/NSM, in due course. The Notice of Meeting will also be made available on the Etalon Group website at www.etalongroup.com.
Dividends
The Board of Directors has declared an interim dividend of USD 0.03 per share for 1H 2016. The dividend represents 43% of the Company's consolidated net profit for the period (based on the Central Bank of Russia exchange rate on 10 November 2016). The ex-dividend date for holders of the Company's Global Depositary Receipts ("GDRs") was set as 24 November 2016, and the record date is 25 November 2016. Dividends are to be paid on 13 December 2016.
Etalon Group President and CEO Viacheslav Zarenkov said: "Following the approval of its new strategy, Etalon Group will be embarking on a new and ambitious stage in its development. We will focus on growth supported by improved efficiency, which should translate into higher dividend payments to shareholders.
"One of the key changes will be better alignment of management and shareholder interests with a new motivation programme. Starting from 2017, senior management remuneration will be closely tied to delivering on strategic targets and on increasing the value of the Company for shareholders. KPI-based bonuses will make up the major part of senior management reward packages, with bonus payments split 50/50 between cash and GDRs. I believe this updated approach will provide the right motivation for management to achieve breakthroughs in the Company's development that will benefit our shareholders and other stakeholders.
"Another step we are taking towards achieving this is building best-in-class corporate governance systems, including by bringing in more non-executive and independent directors to the Board of Directors, and creating an Information Disclosure Committee that will focus on ensuring Etalon continues to lead its sector in the field of transparency and disclosure.
"I am also pleased to note that we are delivering on our updated dividend policy that was adopted in May, with an interim dividend that represents 43% of the Company's consolidated net profit for 1H 2016. The decision was made because Etalon Group is in a solid financial position, with strong operating performance year-to-date which translates into healthy free cash flow."
This and other recent announcements are available on the Etalon Group website: http://www.etalongroup.com/investors/news/
Etalon Group IR Team
T: +44 20 8123 1328
E: info@etalongroup.com
EM
Sam VanDerlip 
T: +44 7554 993 032
T: +7 499 918 3134
E: vanderlip@em-comms.com
About Etalon Group
Founded in 1987 by Viacheslav Zarenkov, Etalon Group has become one of Russia's largest development and construction corporations. The Company focuses on middle class residential real estate in the Moscow and St. Petersburg metropolitan areas, where it operates through Etalon Invest and LenSpetsSMU subsidiaries. With a 29-year history, Etalon Group has one of the longest and most successful track records in the Russian real estate industry.
Since its inception, Etalon Group has commissioned 5 million sqm. Etalon Group's CAGR for deliveries in 2010-2015 was 19%.
Etalon Group's strong reputation among consumers supports its pre-sales business model, which helps the Company to minimise external financing needs for on-going projects while maintaining a secure liquidity position: net debt as of 31 December 2015 was RUB 7,397 million.
The Company is vertically integrated, which helps it to control costs, quality and timing, as well as to demonstrate best-in-class profitability. Etalon Group employs 5,000 people, and its nationwide sales and marketing network covers 37 Russian cities.
As of 31 December 2015, Etalon Group's portfolio comprised 28 projects, with a total of 2.72 million sqm of unsold net sellable area. JLL valued this portfolio at RUB 104,384 million.
For the year ended 31 December 2015, Etalon Group's new contract sales totalled 385 ths sqm, or RUB 35,080 million. Deliveries in 2015 totalled 502 ths sqm.
The Company recorded revenue of RUB 42.4 billion and EBITDA of RUB 7.7 billion for the year ended 31 December 2015.
Etalon Group Limited's GDRs have been traded on the Main Market of the London Stock Exchange since 20 April 2011.

This information is provided by RNS
The company news service from the London Stock Exchange
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