The Group considers the interests of its main stakeholders (customers, shareholders, employees, lenders and wider society) when developing the strategy and the processes to improve its operations. We continually strive to positively contribute to society through the entire scope of our business activities by developing socially-oriented products and services, implementing responsible approaches to our business operations, carrying out sponsorship and charitable activities.

SOCIALLY-ORIENTED PRODUCTS AND SERVICES

TOURISM

Tourism remains one of the most rapidly developing sectors of the Georgian economy. The Group’s real estate business m2 started developing hotels and signed an exclusive agreement with Wyndham Group to develop Wyndham’s three-star Ramada Encore hotel in Georgia. First Ramada Encore opened in Tbilisi in February 2018. m2 is also developing a four-star Ramada hotel in Tbilisi and a three-star Ramada Encore in Kutaisi where the international airport serves low-cost airlines and makes the city popular with tourists visiting Georgia.

AFFORDABLE HOUSING

Currently, the Georgian real estate market is vulnerable to various economic and financial uncertainties. Numerous construction projects remain unfinished for long periods of time, while there is a strong growing demand for housing from the Georgian population. In response to this increasing demand, the Group’s real estate development business, m2 Real Estate was established in order to offer affordable housing to the emerging middle class in Georgia and to young families especially. Nowadays, m2 is a major player in Georgia’s real estate market, offering its customers turnkey apartments with fine-tuned infrastructure: fire-alarm systems in accordance with international standards, round-the-clock security service, maintenance of elevators, as well as common and green areas. m2 Real Estate has completed seven projects so far and has delivered them to its customers within, and frequently, ahead of the agreed deadlines.

The company plans the design and construction processes so that each square metre is distributed efficiently. m2 uses energy efficient construction components, thus bringing energy efficiency of its buildings up to 43%, which in turn translates into lower utility expenses incurred by the tenants. The level of energy savings in m2’s buildings is significantly above that of the average residential properties in Tbilisi. m2 tailors the apartments to its customers’ needs and wishes, allowing them to choose interior design and materials for a fit-out themselves. Since only a few customers can afford to buy large flats with an area exceeding 100 square metres, the company continuously works to optimise the size of its apartments to meet the current demand without compromising convenience and usability of the apartments. In June 2017, m2 acquired BK construction LLC, a local real estate construction company, which is expected to reduce m2’s construction costs and improve the design management process through vertical integration.

A large segment of m2’s customers is made up of young Georgian families (more than 50% of the company’s customers are 23-42 years old). We believe that by continuing to offer affordable housing products, we are helping them to significantly enhance the quality of their lives and enjoy modern living standards.

SPONSORSHIP AND CHARITY

As part of our sponsorship and charitable activities, the Group continues to focus on promoting and enhancing access to education, conserving nature, supporting people with disabilities and special needs, developing social enterprises and facilitating innovative projects that focus on social goods. The Group’s Sponsorship and Charity Policy encourages partnerships with various foundations and Non-governmental Organisations (NGOs) to deliver sustainable results and bring positive change. The Group also implements its own social projects.

GGU regularly runs charitable activities for the social service agency Child and Environment and international humanitarian network Catharsis in Tbilisi. GGU covers the annual water supply expenses for Child and Environment – the agency that cares for homeless children and children with disabilities. Twice a year GGU sponsors the project Dinner for Everyone, which is organised by Catharsis for approximately 3,000 people.

Aldagi supports many socially vulnerable people by one-time help upon special requests. The company traditionally provides a home for at least one family every Christmas. Aldagi’s employees are engaged in various programmes that supply socially vulnerable people with food and first aid kits.

As part of its sponsorship activities, Teliani Valley focuses on promoting a healthy lifestyle. As the sponsors of the Georgian Rugby Union and National Olympic Committee, the company aims to attract more youngsters to healthy activities. The company is a main sponsor of the Georgian Tag Rugby initiative that is the biggest platform for raising awareness of a healthy lifestyle among school children.

GHG supported the construction of a children’s hospice, which aims to create a friendly and comfortable atmosphere, where, in addition to caring personnel, a great importance is attached to the environment and the interior. GHG traditionally participates in the state Children’s Oncology Programme, under which the company offers cancer-related conditions treatment for children with different cancer disorders (leukaemia, tumours, and lymphomas) in GHG’s Iashvili Paediatric Tertiary Referral Hospital, a multi-profile paediatric medical establishment.

In 2017, the Group provided GBP 89,532 to finance a master’s degree programme for three students. The partnership with Chevening will continue next year and the Group is looking forward to selecting students who will continue their studies in the UK.

In 2017, m2 Real Estate’s subsidiary BK Construction signed a memorandum of cooperation with the Ministry of Education and Science of Georgia. According to the memorandum, m2 will build an institute for vocational education in the Municipality of Zestaponi (Western Georgia). The institute will offer more than 20 short-term vocational courses in engineering to more than 200 students annually. The studies will include both theoretical and practical courses. The latter will be conducted on m2’s construction sites. Most of the alumna will be employed by m2 and its subsidiary BK Construction.

Supporting people with disabilities. m2 is in the process of constructing a new specialised family-type home for children with severe disabilities. The project is built in Tbilisi within the framework of Protection of Children with Disabilities – a project run by the United States Agency for International Development (USAID). The project is being carried out by the Ministry of Labour, Health and Social Affairs, USAID and United Nations Children’s Fund (UNICEF) since 2015. The goal of the specialized home is to ensure that the children receive care in a family-like environment and are provided with all the services necessary for their adequate growth, individual development and smooth integration into society. After construction and renovation works are completed, seven children with severe forms of disability will be moved to live in the house. It is worth noting that all m2 buildings are friendly to people with special needs.

Conserving nature. Another priority of the Group’s charitable activities is the preservation of wildlife diversity. In 2017, GGU granted GEL 250,000 to restore a forest in Borjomi Gorge after a massive wildfire in August 2017.

In 2017, m2 committed to restoring a landscape and a burnt territory of 20,000 square metres on Tbilisi’s Mtatsminda slope. The works are conducted jointly with Tbilisi City Hall, Caucasus Environmental NGO Network (CENN), Regional Environmental Centre for the Caucasus (REC Caucasus), the Greens Movement of Georgia (GMG), botanical institute of Ilia State University and the Ministry of Environment and Natural Resources of Georgia. m2 was also one of the sponsors of the all-time football stars charity game held at Tbilisi Dinamo Arena, dedicated to the restoration of the forest burnt in Borjomi Gorge in August 2017.

Air quality is an immediate and acute problem in Georgian cities, affecting people’s quality of life. In order to increase awareness of climate change and contribute to a healthier environment, m2 actively promotes electric vehicles. As part of its spring campaign, the company offered its customers electric scooters as a gift. Moreover, throughout 2017 m2 contributed to developing infrastructure for electric vehicles by financially supporting a start-up company E-space with the installation of up to 50 charging stations in the country (Tbilisi, Batumi, Kutaisi, Rustavi, Kvareli and Telavi).

GHG contributed GEL 500,000 to rehabilitate the damaged area and to help restore the remarkable nature in Borjomi. With the support of the CNF, the company is involved in the Project on Maintenance of Caucasus Natural and Cultural Heritage. The fund is meant for effective long-term management of the protected territories of Armenia, Azerbaijan and Georgia. In 2017 GHG donated GEL 52,800 to support the project.

David Morrison, Georgia Capital Board member serves as the Chairman of the Board of Directors of CNF. The management concluded that the fund is not a related party in accordance with the IFRS and the payment does not constitute director’s remuneration.