ZAO DSK Blok Certified for Conformity with the ISO 9001:2000 Standard by SGS

ZAO House Building Company Blok (a subsidiary of LSR Group) has successfully passed a certification audit conducted by SGS, the world’s leading independent certification body with headquarters in Switzerland. In the course of audit, the specialists of SGS Vostok Limited, the Russian subsidiary of SGS, verified the Quality Management System (QMS) of DSK Blok for compliance with the requirements of the ISO 9001:2000 international standard and delivered a positive opinion to issue an International Standard Certificate for a term of three years. Thus both of the house building companies of LSR Group (OJSC Gatchinsky DSK and ZAO DSK Blok) are now the holders of International Standard Quality Certificates.

The key reasons for QMS introduction and certification at ZAO DSK Blok included the company’s decision to systematize its business processes in order to improve product quality as well as the likely abolishment of mandatory licensing in the construction sector.

The milestones of QMS development and assimilation included auditing and assessing the existing management system, identifying the key QMS processes, developing the quality policies and objectives for the company as a whole and its 46 divisions in particular, describing the processes and their performance criteria, documenting the responsibilities and powers of the divisions and personnel and their competency requirements, streamlining the process infrastructure as well as training auditors and setting up an internal audit system. All of the employees of ZAO DSK Blok (over 1,500 people) got involved in the QMS implementation and preparations for certification.

Alexander Gobeev, General Manager of ZAO DSK Blok commented:

“The award of the certificate confirmed to us that our products and organization of all business processes meet the highest world standards of quality. All this provides us with evident benefits such as increases in the efficiency, productivity and investment attractiveness of the company. Moreover, it will help us build mutually advantageous relations with our customers and control strict compliance with all contractual obligations.”

Konstantin Timoshechkin, Head of Systems and Services Certification Department of SGS Vostok Limited commented:

“The abolishment of licensing in the construction industry will encourage the conscientious selection of voluntary certification systems by the market players. The ISO 9001 certification is considered an efficient quality management tool worldwide. Opting for this standard DSK Blok enhances its competitiveness not only within Russia but in the global markets too.”

Notes to Editors:

ZAO House Building Company Blok is one of the St. Petersburg panel construction market leaders in the manufacture and construction of prefabricated reinforced concrete houses. Founded in 1992, it is the only company in the panel construction market of St. Petersburg using the seamless facade fit-out technology. In 2007, DSK Blok was awarded the status of “Leader of Russian Economy 2006.”

OJSC LSR Group is a diversified construction company founded in 1993 and operating in a number of complementary market segments. Its core business areas are building materials, construction and real estate development. The Group includes enterprises for extraction and processing of aggregates, production and transportation of building materials, and housing construction — from mass market large-panel housing to elite property built after designs made by leading domestic and foreign architects.

LSR Group has operations and offices in a number of cities in the Leningrad Oblast, in St. Petersburg, Moscow, Yekaterinburg, Lithuania, Latvia, Estonia, Ukraine and Germany. LSR Group employs over 15,000 people.

In 2007, the sales revenues of LSR Group (according to the IFRS-based financial statements) were US$ 1,403 million.

LSR Group is a public company, with its GDRs listed on the London Stock Exchange and its shares listed on MICEX and RTS.

LSR Group has a B1 rating from Moody’s Investors Service (outlook — Stable) assigned in July 2007 and confirmed on 30 May 2008, and a B+ rating from Fitch Ratings (outlook — Stable) assigned on 30 May 2008.

In 2007, LSR Group was awarded ‘The Company of the Year’ National Award in the ‘Construction’ category.

SGS Group is the world leader and innovator in verification, testing and certification. Established in 1878, it is today recognized as the benchmark of quality and business ethics. SGS is the major international body for management systems certification with 80,000 certified clients in 80 countries; 105,000 certificates issued and 40 national ISO 9001:2000 accreditations.

For more details please contact:

ZAO House Building Company Blok
Ekaterina Yemelianenko
Lead Specialist in Public Relations
Tel.: +7 (812) 598-5203, +7 (812) 936-5356
press@dskblock.lsrgroup.ru
www.dskblock.ru

Press Service, LSR Group
Tel.: +7 (812) 314-1044
press@lsrgroup.ru
www.lsrgroup.ru

ZAO SGS Vostok Limited (SGS Group)
Tatiana Apatovskaya
Marketing Manager
Tel.: +7 (495) 775-4621 Ext. 262, +7 (916) 901-3404
Tatiana.Apatovskaya@sgs.com
www.ru.sgs.com