DEVELOPMENT STRATEGY OF KAVKAZ.RF JSC 2026 YEARS AND FORWARDS 2031 YEARS
Moscow 2022
APPROVED by the Board of Directors of KAVKAZ.RF JSC Protocol No. 106 from "28" December 2022 g.
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Table of contents
1. General provisions of the Strategy……………………………………………………………………......................
2. Mission, vision, goals, objectives, principles and approaches
3. Priority areas of the Strategy………………………………………………………………………
4. Marketing agency………………………………………………………………………………………………..
5. Investment policy and tools for the implementation of the Strategy.
6. Stages and roadmap for implementing the Strategy………………………………
7. Necessary resources for the implementation of the Strategy ...................................................
8. Motivation system and key performance indicators of the Company
for the implementation of the Strategy .................................................................................................................................................................................................................................................................
9. Managing the risks of implementing the Strategy.................................................................
10. Monitoring and control of the implementation of the Strategy ...................................................
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7
9
12
17
22
25
27
32
35
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1. General provisions of the Strategy
North Caucasus Federal District
The North Caucasus Federal District is a priority geostrategic macroregion of the Russian Federation, which occupies an important geo-economic and geopolitical position, being the Russian Federation with the countries of the Caucasus and the Middle East. At the same time, the overall level of the sphere and human capital of the macro-region is lower than the average indicators in the Russian Federation.
infrastructure,
Binding
Social
Transit
the corridor,
economy,
Main
Development
These circumstances cause special attention to its development by the Government of the Russian Federation and the demand for special mechanisms of state support, including a separate federal development institute aimed at helping solve the problems of the regions of the North Caucasus Federal District.
the Order of the Government of the Russian Federation 30 April 2022 № 1089The Strategy of Socio-Economic Development of the North Caucasus Federal 2030 the main problems of the macroregion, development goals and objectives, priority areas of development and sectors of the economy.
period up to
County
the City
Following the discussion in the Government of the Russian Federation 2020 In the year of discussion of the problem of increasing the effectiveness of existing development institutions and the need to reform them, it was decided to 31 December 2020 (the Government of the Russian Federation 31.12.2020 № 3710-p) on the merger of the North Caucasus Resorts Joint Stock Company, the North Caucasus Development Corporation Joint Stock Company and the Elbrus Resort Joint Stock Company into a single Company. The merger of the companies was carried out by joining KSK JSC and Resort Elbrus JSC. Joint Institute for Development of North Caucasus Federal District, established on the basis of JSC "KSK", received a new name - joint-stock company "KAVKAZ.RF" (hereinafter - JSC "KAVKAZ.RF", the Company, the Institute for Development).
5
The sole shareholder of the Company is the Russian Federation (represented by the Ministry of Economic Development of the Russian Federation), whose share in the authorized capital is 100%.
The actual unification of development institutions on the basis of KSK JSC, which engaged in different approaches, requires the revision of all elements of the new emerging Company (ideology, goals and objectives, structure and management).
Utilized
Destinations
different
and
the University of London
The new Company is tasked not only with supporting and developing the tourism industry, but also with supporting projects aimed at developing priority sectors of the economy, as defined in the Strategy for the Socio-Economic Development of the North Caucasus Federal District for the period up to 2030 of the year, as well as investment projects included in the models of economic development of the regions of the North Caucasus Federal District, approved by the Chairman of the Government of the Russian Federation M.V. Mishustin (protocol solution from 26.11.2021 No MM-P47-33Ave).
The strategy takes into account the following strategic documents and regulations:
legal acts:
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●
●
●
●
●
●
Decree of the President of the Russian Federation 7 May 2018 № 204 On National Goals and Strategic Objectives of the Development of the Russian Federation for the Period up to 2024 Year;
Decree of the President of the Russian Federation 21 July 2020 № 474 National Development Goals of the Russian Federation for the Period up to 2030 Year;
Decree of the President of the Russian Federation 13 May 2017 № 208 Strategy of economic security of the Russian Federation for the period up to 2030 Year;
Decree of the President of the Russian Federation 2 July 2021 № 400 On the National Security Strategy of the Russian Federation;
Decree of the President of the Russian Federation 16 January 2017 № 13 About approval of the Fundamentals of the state policy of regional development of the Russian Federation for the period up to 2025 Year;
The Strategy of Spatial Development of the Russian Federation for the Period up to 2025 of the year (Order of the Government of the Russian Federation 13 February 2019 № 207-r);
Implementation plan of the Strategy of Spatial Development of the Russian Federation for the period up to 2025 of the year (Order of the Government of the Russian Federation 27 December 2019 № 3227-r);
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●
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●
●
●
●
the Strategy of the Federal Period of the Russian Federation 30 April 2022 № 1089-r);
the Social and Economic
North Caucasus (order)
2030 years
Development
County
to
State Program of the Russian Federation "Development of the North- (Decree of the Caucasian Federal Government of the Russian Federation of 15 April 2014 No 309);
up to 2030
Strategy of tourism development in the Russian Federation for the period up to 2035 of the year (Order of the Government of the Russian Federation 20 September 2019 № 2129-r);
Development
Strategy of the Federation of 26 November 2018 No 2581-r);
(Order
Sanatorium and Resort Government
the Russian Federation Complex
Development
North Caucasus Strategy for the Federal District 2035 of the year (Order of the Government of the Russian Federation 7 March 2019 № 369-r);
Territory
Tourism
Plan for the implementation of the Strategy for the Development of Tourism in the North Caucasus Federal Territory (Order of the Government of the Russian Federation No. 5 July 2021 of 1802-r);
County
2035
Year
to
activities and projects formed within the framework of models of economic development of the constituent entities of the Russian Federation that are part of the North Caucasus Federal District.
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2. Mission, vision, goals, objectives, principles and approaches
The mission of the Society is to promote socio-economic policy in the territory of the North Caucasus Federal District in order to accelerate the pace of economic development of the macro-region and improve the standard of living of the population.
State
effective
Realization
The vision of KAVKAZ.RF is the core of the ecosystem of support for the development of the North Caucasus Federal District.
Values of the Society 1. Desire for partnerships with counterparties from among the bodies
government and business communities, public organizations.
2. Promoting innovation in all areas. 3. Attitude to employees as the main capital of the company. 4. Ensuring a systematic contribution to the socio-economic development of the NCFD. 5. Respect for the traditions and history of the peoples of the NCFD. 6. Promotion of sustainable development of the territories of the NCFD, careful attitude
to the unique natural landscapes of the North Caucasus.
The basic ideologue of the Society Diversity and partnership are the foundation of development.
The strategic goal of the Company is to promote the creation of an attractive investment environment in the North Caucasus Federal District and the implementation of projects aimed at unlocking the socio-economic potential of the North Caucasus Federal District and improving the living standards of the population of the macro-region. The Company achieves this goal by solving the following strategic tasks:
1. Assistance in the development of priority sectors of the economy of the regions of the North Caucasus Federal District, as defined in the Strategy for Social and Economic Development of the North Caucasus Federal District until 2030.
2. Attracting partners and investors, including national institutions
development and financial structures, in projects in the territory of the NCFD.
3. Ensuring equal and visible presence of the Company in all regions
SKFO.
4. Optimization and enhancement
efficiency of state participation in projects in the North Caucasus by searching for the most optimal measures for specific projects.
5. Implementation of non-financial support measures to find financial resources
and support the regions of the NCFD when they are received.
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The creation of a single institute for the development of the North Caucasus Federal District is aimed at improving the efficiency of the Company's activities. In addition to changing the ideological component of the new development institution, the paradigm of the Society itself is changing.
1. The Society’s activities are based on the following system of principles: 2. Actions
transparent. The company implements projects that are significant and able to attract third-party (in cost-effective (bankable).
(b)banking,
The expert,
Systemic
Society
are
t.u.m.
and
3. The society is guided by the principles of sustainable high
Development *: responsible attitude of social responsibility; high quality of corporate governance.
to the environment;
In addition, the Corporation uses the following approaches in its activities:
• Ecosystems. The society considers the external environment of its activities as interrelated and transforming resources, and sees its role in harmonizing this system and giving it additional impetus to development.
The actors,
complex
System
• Formation
Partnerships. Society
A key player in attracting new partners, including national development institutions and financial structures to the macro-region, the main moderator in the creation of partnerships in the territory of the North Caucasus Federal District.
He speaks
Active
• Digital transformation. The Society is a development institution that seeks to bring digital technologies and solutions to development projects implemented in the North Caucasus Federal District.
• Work with the macroregion at different levels of government. The Company’s work is built on the system of business-oriented offices with the need to interact with partners within the macroregion and beyond, as well as ensure an equal and noticeable presence in all regions of the North Caucasus Federal District.
To ensure the strategic maneuver, the Company will re-engineer business processes - organizational transformation of the Company and the transition to a system of business-oriented offices. This transformation will introduce a design and product approach, as well as provide an "equal" and "noticeable" presence in all regions of the North Caucasus Federal District by strengthening linear functional links in contrast to the previous organizational structure of the Company, blurred in the accompanying business processes.
* The principles of ESG include three main components: environmental, social and governance.
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3. Priorities of the Strategy
1. Developer of growth points
Society creates and develops growth points:
• resorts and significant tourist areas:
- existing projects: Arkhyz, Elbrus, Mamison, Veduchi, Armhi; - new projects: Caspian coastal cluster, Cheget, Kezena Am, Dombay; - tourist territories of the regions of the North Caucasus Federal District;
• tourist ropeways and adjacent areas; • technoparks, industrial and agro-industrial parks; • wholesale distribution centers, fruit and vegetable storages.
The main approach in the implementation of the “Developer of growth points” direction is based on attracting partners to promising projects, joint development and bringing projects to a state where they form a positive EBITDA and are stable. After the release of the project for operational payback, the Company leaves it.
Within the framework of these projects, the Company may act as a management company.
The implementation of the direction will solve the following problems and tasks: • increase in the number of local centers of population growth and attraction; • Improving the level of development of the real sector of the economy; • removal of restrictions for the development of large, medium and small businesses; • Decrease in the share of the shadow economy; • Reduction of unemployment.
Figure 1. Estimated perspective budget for the implementation of the direction "Developer of growth points", billion rub.
83
39
32
12
2022
2023-2025
2026-2030
2022-2030
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2. Shareholder-investor, financial consultant and investor of "breakthrough"
and large projects
The Company promotes the implementation of "breakthrough" and large projects in the regions of the North Caucasus Federal District (including projects to create sanatoriums and hotels, the implementation of electric transport infrastructure (including urban), etc.), in the field of housing and communal services, systematically influencing the solution of the main tasks of the economic development of the macroregion (initiates, enters projects as a shareholder, advises).
Fuel and Energy
Infrastructure
(Airports,
Complex
projects
E.g.,
and
and
The main approach in the implementation of the direction "Investor-shareholder, financial consultant and investor of "breakthrough" and large projects" is the initiation of new projects or entering into existing projects with the subsequent involvement of partners, "packaging" projects and organizing their financing, including monitoring and monitoring the implementation of projects, as well as providing the services of a financial consultant for the evaluation and "packaging" projects, attracting funding and informing about available state support measures, including measures to support federal development institutions.
The company can participate in the co-financing of projects.
In case of initiation of new projects or entry into existing projects with the subsequent involvement of partners, after reaching the project capacity / payback of the project, the Company (if appropriate) withdraws from it.
The implementation of the direction will solve the following problems and tasks:
• Improving the level of development of the real sector of the economy; • promotion of the level of development of financial and credit sphere; • increase in the number of local centers of population growth and attraction; • Reduction of unemployment; • elimination of bottlenecks in the transport system of the macroregion.
Figure 2. Estimated perspective budget for the implementation of the direction "Investor-shareholder, financial consultant and investor of "breakthrough" and large projects", billion rub.
47
27
15
5
2022
2023-2025
2026-2030 2022-2030
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3. Developer of standard solutions and business consultant of small business entities
and medium-sized enterprises
Society
Supports
small and medium-sized enterprises in the framework of interaction with regional development corporations through the promotion of "box" (typical) solutions:
implementation of projects
Subjects
• glamming, small hotel complexes, roadside service
complexes;
• greenhouses, family farms, fruit and vegetable storage; • Warehouse complexes and parking.
Elaboration
Economically
The main approach in the implementation of the direction "Development of standard solutions and business consultant of small and medium-sized businesses" is potentially the search for scalable business plans and financial models according to the standards of SME Corporation JSC and financial organizations - partners in order to bring them to compliance with the parameters of "box" / standard solutions. After that, the Company transfers projects to regional development corporations for promotion and co-finances them if necessary.
Eligible
assistance
Reworked
projects,
and
the University of London
The implementation of the direction will solve the following problems and tasks:
• decrease in the share of the shadow sector of the economy; • promotion of the level of development of the financial and credit sphere; • decrease in unemployment; • decrease in the number of depressed rural mountainous areas.
Figure 3. The estimated prospective budget for the implementation of the direction "Developer of standard solutions and business consultant of small and medium-sized businesses" billion rub.
2,4
2,1
0,3
0
2022
2023-2025
2026-2030 2022-2030
14
15
4. Marketing Agency
The Company forms and comprehensively promotes a positive investment image of the North Caucasus Federal District, increases the recognition of the territories and brands of the North Caucasus Federal District, the Company’s brand and products in Russia and the world, and forms a quality mark. In addition, the promotion of the Company in the business environment of new business ideas and niches for the implementation of projects in the territory of the North Caucasus Federal District.
Formation
Executes
search,
and
Taking into account the strategic positioning and goal-setting, principles and approaches to the organization of activities, the Company forms the most appropriate to the specified conditions architecture of the Company's brand - a hybrid, combining the architecture structure of the Company-brand * (strategy when products act as a sub-brand under a parent brand) and the House of Brands ** (strategy when individual products and services are considered as separate brands) depending on the specific situation and project. Hybrid architecture with development flexibility. In this case, the brand expansion strategy will be used.
use
Retaining
will allow
Strong
brand,
When choosing marketing communications, the priority is given to indirect communications (BTL-communications (below the line, i.e. “under the line”)): expanding public relations, sales promotion and direct marketing, adapted to the tools and directions of the digital transformation strategy.
Event marketing (event-marketing). The Company is the initiator and organizer of business and social events in the North Caucasus Federal and macro-regional level, actively participates in regional events, co-finances the participation of government and business in congress and exhibition events.
Content marketing, social media marketing, social media brand reputation management, storytelling, influencer marketing (content-marketing, SMM, SMRM, storytelling, influencer-marketing). The Company uses modern electronic means of communication for the formation and maintenance of branded communities, reputation management, content formation, joint search and formation of ideas for the development of the North Caucasus, etc.
partner organizations,
Agents
influence,
C
Them
Sales (sales
promotion). Within the framework of
Cooperation Stimulation with regional administrations and development institutions The Company promotes the developed "box" solutions for small businesses, co-financing stimulating and the possibility of direct and indirect advertising of projects through the Company's channels. Also, the Company carries out the program "Quality Mark" - a system of assigning the most high-quality and popular products produced in the North-Eastern Federal District, a special sign with the right to use it by manufacturers of products to promote goods and services and the Company's obligations to promote these products through its channels.
BBQ
Implementation
*Branded House **House of Brands
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(direct
Marketing
marketing)
Direct interaction with a narrow segmented audience. As a result of the use of its own database and the database of regional authorities, as well as the activities carried out by entrepreneurs, the Company and the management of companies implementing projects in the territory of the NCFD, informing about the capabilities of the Company to assist in the implementation of projects and advising on the details of a possible partnership.
Executes
Meetings
For
C
The implementation of the direction will solve the following problems and tasks:
• promotion of a positive investment image of the NCFD; • realization of the potential of priority sectors of the economy; • increase in the level of development of the real sector of the economy.
Figure 4. The estimated prospective budget for the implementation of the direction "Marketing Agency", billion rub.
1,1
0,8
0,2
0,05
2022
2023-2025
2026-2030 2022-2030
17
5. Personnel operator
The company promotes the management of labor migration, as well as the improvement of training and retraining of labor resources in the North Caucasus Federal District.
Practice-Oriented
programs
The main approach in the implementation of the "Personnel Operator" direction is the creation and development of an information system that provides analysis and forecast of the labor market and the personnel needs of the economy of the North Caucasus Federal District and other subjects of the Russian Federation (by professions, specialties, areas of training). The Company assists employment services and recruiting agencies in improving the system of search and selection of personnel for work on rotational projects of implementation by the method in the North Caucasus Federal District and other subjects of the Russian Federation.
Investment
Large-scale
the University of London
Higher Education
The Company also organizes with organizations of primary, secondary practice-oriented and resource programs, co-financing them if necessary.
Vocational Training
Education Retraining
Labor
and
The implementation of the direction will solve the following problems and tasks:
• Reduction of unemployment; • improving the quality of services in the field of vocational education; • Involvement of the labor resources of the regions of the North Caucasus Federal District in the implementation of regional
projects.
Figure 5. Estimated perspective budget for the implementation of the "Personnel Operator" direction, billion rubles.
0,3
0,2
0,1
0
2022
2023-2025
2026-2030 2022-2030
18
6. Organizer of socially-oriented practices
The Company, together with federal executive authorities, development institutions, specialized organizations, professional education organizations, organizes the promotion of advanced socially oriented practices in the regions of the North Caucasus Federal District:
• human capital development (worldskills, hackathons, case championships,
"boiling points", etc.);
• Social Entrepreneurship; • Social projects of non-profit organizations.
Best
Operators
practices" - selection
The main approach in the implementation of the direction "Organizer of socially-oriented social-oriented practices, the creation in partnership with them adapted to the regions of the NCFD programs and projects. The company organizes the implementation of selected practices in the macroregion in conjunction with regional development institutions, and also initiates the development of its own socially-oriented thematic forums and other events in the regions. In the future, the Company coordinates the implementation of socially-oriented synergistic effect in order to obtain a federal district.
Holding
practices,
Practitioners
The implementation of this direction will contribute to the creation and development of a favorable living environment for residents of the macroregion, the formation of their active social position, improving the standard of living of citizens, including socially vulnerable categories of the population.
Human capital development practices are aimed at developing modern competencies and skills that increase the level of their adaptation to the ongoing social and economic processes and encourage them to actively participate in these processes.
The implementation of the direction will solve the following problems and tasks:
• Improving the accessibility and quality of socially-oriented practices
for the population of the regions of the NCFD;
• increase in social activity in the NCFD, increase in the number of social projects
orientation;
• involvement of youth in social practices, self-realization of youth;
development of additional skills, advanced training;
• Entrepreneurship development.
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Figure 6. Estimated perspective budget for the implementation of the direction "Organizer of socially-oriented practices", million rubles.
7
5
2
0
2022
2023-2025
2026-2030 2022-2030
20
21
5. Investment policy and tools for the implementation of the Strategy
The Company’s investment policy is aimed at facilitating the implementation of cost-effective and socially significant projects in the NCFD aimed at implementing the goals and objectives set for the Company within the framework of this strategy, including the creation of an investment attractive environment in the macroregion.
Currently, the Regulations on the Company’s Investment Policy, approved by Order No. 985Р-РМ of the Minister of Economic Development of the Russian Federation, M. G. Reshetnikov, dated 11 November 2022, provide for the following activities of the Company:
Investment
Implementation
Tools
• debt financing of initiators (provision of targeted loans to initiators) in the framework of joint transactions with credit organizations, and (or) development institutions, and (or) other legal entities;
• targeted loan financing of credit institutions for subsequent lending in order to implement investment projects in the North Caucasus Federal District;
• payment of shares of closed mutual funds under the management of the limited liability company "KRSK - Asset Management", which invests the funds of mutual funds in the form of debt financing of the initiators (provision of targeted loans to the initiators);
• debt financing of initiators (provision of targeted loans to initiators) under guarantees of credit institutions, and (or) VEB.RF, and (or) SME Corporation JSC.
within
Activities
Investment
V provides financing for investment projects in priority sectors of the economy in the Strategy of socio-economic entities of the NCFD, certain development of the NCFD to 2030 years, including those included in the models of economic development of the regions of the North Caucasus Federal District, approved 26 November 2021 Chairman of the Government of the Russian Federation M.V. Mishustin (Minutes of the Meeting with the Prime Minister of the Russian Federation 26 November 2021 No MM-P47-33Ave).
Society
An important condition for the implementation of the Strategy and the implementation of the investment policy is the introduction of a new set of investment and financial instruments that will complement the federal instruments of state support for other development institutions, taking into account the peculiarities and specific problems of the NCFD.
The use of new investment and financial instruments will improve the quality of investment projects that claim external financing, reduce the financial risks of investment projects in order to increase their attractiveness for financial and credit institutions and development institutions, increase the profitability of investment projects implemented in the territory of the NCFD, and also increase the multiplier effects.
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The introduction of a new set of investment and financial instruments will require actions and initiatives on the part of the Company to change the approaches, principles and criteria for investing in the Company, as well as the federal and corporate regulatory framework.
To implement the Strategy, the possibility of using the following tools will be explored.
1. Debt and (or) equity financing of projects
The company selects partner organizations that implement projects in the North Caucasus Federal District that systematically affect the solution of the main tasks of the economic development of the macroregion. The company is part of the capital and management bodies of existing and newly formed companies and organizations (creates joint ventures), which implement specific projects, including under concession agreements, or issue loans for the implementation of projects. The company may initiate projects, including concession projects. The company provides borrowed equity financing of projects, helps, if necessary, attract additional external financing, controls the progress of projects.
Receiving
projects;
Partly
Risks
Myself
the City
2. Support for projects in the pre-investment phase (bridge-
financing)
Bridge financing (from English bridge - "bridge") - a short-term loan that is taken to cover the costs of the pre-investment phase in anticipation of the main funding.
Valuation
Promising
Project society and obtaining long-term loan financing. Further, the Company provides loan financing for the launch of the project and monitors the progress of the pre-investment phase of the project, including the provision of consulting services, and obtaining long-term financing.
Investment
Ideas
3. Ready-made business solutions (“typical products”) for small businesses
and medium-sized enterprises
Development and implementation of ready-made business solutions and "typical products" of entrepreneurship for the implementation of the investment economies of the North Caucasus Federal District, priority jointly financed by the Company with credit and financial organizations and development institutions.
the Small Business Unit
Middle
projects
Sectors
and
This tool includes:
• Formation of a catalogue of “typical products” in priority sectors
economy;
• creation
typical business plans,
Feasibility studies
and financial models;
23
• - organization of co-financing of "typical products" (participation in capital, debt
with fixed
income;
Exit
the City
including financing options);
• bank support of projects (consultations and assistance in obtaining
Loan financing);
• administrative land support; • assistance in financing technological connections; • assistance in project promotion (sales, marketing, IT, integration
market, certification and standardization).
4. Increasing market value and investment attractiveness
Land (Land Development)
–
Investment
Land development involves increasing the value of a land plot through the development of a concept of its development, the formation of urban planning documentation, the construction of infrastructure, etc. for the purpose of further sale / lease of a land plot or its individual parts.
instrument,
The company analyzes promising growth points in urban agglomerations, ski clusters, transport and logistics corridors, etc. Further, the Company develops a project for the development of the territory at a promising growth point, buys or leases a land plot, establishes a project management company.
Executes
construction/reconstruction
Engineering Society and Transport Infrastructure Project. Also, the Company searches for potential residents and provides them with formed and provided with the necessary infrastructure land plots, provides other standard services of the Criminal Code, including assistance in obtaining support measures. Role of the Company - management company of development projects in:
• projects
Redevelopment
Old
Industrial
Zones
the University of London
Urban
agglomerations;
• projects of industrial land development — creation and management
industrial parks;
• projects of land development of ski and sanatorium-recreational
Resorts.
5. Joint
implementation of investment, including innovative, projects, carried out in the form of investment partnerships
Investment
Activities
Objectives
the University of London
Investment partnership agreement (DIT) is a form of joint investment activities of partners to invest common property in investment projects. Project investment commitments are disclosed as funding becomes necessary.
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The company forms a data bank on projects that have problems with bank financing, assesses their prospects, risk profile. It is possible to form pools of projects of one industry, for example, tourism or agriculture. Further, the Company searches for investment partners (companies) for the development of projects experiencing problems with bank financing, and organizes the signing of DIT. The company enters DIT as a managing partner, invests its own funds and controls the fulfillment of obligations by fellow investors, as well as the progress and results of projects.
6. Support for socially-oriented practices
Social entrepreneurship is a business aimed at achieving socially useful goals and contributing to solving social problems of citizens and society, in particular:
• Employment of socially vulnerable categories of population; • production of goods and services for socially vulnerable categories of people; • conducting activities aimed at achieving socially useful goals and contributing to the solution of social problems (organization of recreation and rehabilitation of children, cultural and educational activities, etc.).
Pedagogical and Social
services,
The company selects the best operators of socially-oriented practices, and creates projects adapted to the regions of the NCFD in partnership with them. Further, he organizes, together with local development institutions, the implementation of selected practices, and also initiates the development of own practices in the regions, holding thematic forums and other events.
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6. Stages and road map for the implementation of the Strategy
The strategy is implemented in three stages in the following terms: • Stage I - Reengineering of management approaches and implementation of "fast"
projects in 2022.
• Stage II - Launch of design and product activities in 2023 - 2025 years. • Stage III - Launch of the second stage of "breakthrough" and interregional
investment projects in 2026 - 2030 years.
Stage I - Reengineering of management approaches and implementation of "fast" projects in 2022
The first stage of the Strategy is aimed at introducing new tools of work into the Company’s activities.
Table 1. The first stage of the implementation of the Roadmap Strategy
No Event
Time frame for implementation
Responsible Expected Results
1.
1.
1.
1.
1.
1.
1.
Adoption of the Strategy for the Development of Society
31.12.2022
JSC "KAVKAZ.RF"
Board of Directors approved Strategy
Approval of the digital transformation strategy and modernization of the Company’s information portal
31.12.2022
JSC "KAVKAZ.RF"
Approval of the new investment policy of the Company
31.12.2022
JSC "KAVKAZ.RF"
The Strategy of Digital Transformation of Society approved by the Board of Directors
Updated information portal on the Internet Approved by the Board of Directors new Regulation on the Company's investment policy
Conclusion of partnership agreements with federal development institutions on joint mechanisms Development of priority projects in the field of tourism (including the organization of development of master plans of tourist territories)
31.12.2022
JSC "KAVKAZ.RF"
Signed agreements
31.12.2022
JSC "KAVKAZ.RF"
Started priority projects in the tourism sector
Selection of socially oriented practices
31.12.2022
JSC "KAVKAZ.RF"
Approval of the Company’s adjusted KPIs and management for the years 2023, 2024 and 2025
31.12.2022
JSC "KAVKAZ.RF"
Partnership agreements have been concluded, the first projects have been launched
Approved by the Board of Directors of KPE Company and Management for 2023-2024.
27
Phase II - Launch of design and product activities (2023 - 2025 years)
Stage
Second
Implementation of the organizational strategy of transformation of the Company, as well as ensuring the launch of “breakthrough” and large interregional investment projects in priority sectors of the economy of the North Caucasus Federal District. Much of the success of this stage will depend on the effectiveness of the further work of the Company as a whole.
Linked
C
Table 2. The second stage of the implementation of the Roadmap Strategy
No Event
Approval of the long-term development program (DDP) of the Company Organizational and functional restructuring of the Company - approval of the new organizational structure and staffing of the Company
Approval of the Company's Corporate Code
Formation of a catalog of "typical products / solutions" for SMEs (concept, business plan, financial model) Approval of a marketing strategy, including the concept of brand architecture of JSC "KAVKAZ.RF" and a PR and GR program to promote the investment attractiveness of SKFO Implementation of new projects in the field of industry, agriculture, new technologies, logistics, urban projects Implementation of the project "Managed labor pendulum migration"
Launch of a program for the implementation of "typical products / solutions" for SMEs in the regions of the NCFD
Time frame for implementation
2023
Responsible Expected Results
JSC "KAVKAZ.RF"
Approved by the Board of Directors of DPR Company
2023
JSC "KAVKAZ.RF"
The new organizational structure of the Society was approved
2023
2023
2023
JSC "KAVKAZ.RF"
JSC "KAVKAZ.RF"
Approved the provision on payment and bonuses Approved the corporate code of the Company
JSC "KAVKAZ.RF"
Catalog of "typical products" developed
2023-2025
JSC "KAVKAZ.RF"
2023-2025
JSC "KAVKAZ.RF"
Strategy for promotion is approved
positive investment image of NCFD
New jobs created, extra-budgetary investments attracted
2023-2025
JSC "KAVKAZ.RF"
Reduced unemployment
2023-2025
JSC "KAVKAZ.RF"
Implementation of strategic and program documents of the Company
2023-2025
JSC "KAVKAZ.RF"
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
New jobs created, extra-budgetary investments attracted
Increased investment and social attractiveness of NCFD
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Stage III - Launch of the second phase of "breakthrough" and interregional investment projects (2026 - 2030 years)
"Breakthroughs"
At the third stage of implementation of the Strategy, the Company will ensure the launch of the second stage of interregional projects in priority sectors of the economy of the North Caucasus Federal District. The implementation of the activities of this stage is aimed at strengthening the results achieved at the previous stage and increasing the efficiency and multiplier effect of the start of the implementation of the first wave projects.
Investment
and
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7. Necessary Resources for the Strategy Implementation
Implementation of the Company’s Strategy is aimed primarily at creating a critical mass of new breakthrough projects in the North Caucasus Federal District, which will allow the macro-region economy to create conditions for the emergence of projects in the field of small and medium-sized businesses in priority sectors of the economy, as well as ensure the growth of the revenue part of the budgets of the regions of the North Caucasus Federal District.
competitiveness
significantly
raise
An important condition for the implementation of the Strategy is the consolidation of resources and cooperation of all stakeholders. The implementation of the goals and objectives of the Strategy is possible with the support of state authorities and with the active involvement and participation of federal development institutions, large businesses and financial institutions.
The resource support of the Strategy is built in such a way that on the one hand it increases the financing of specific projects for the development of the NCFD, and on the other hand it reduces the costs of maintaining supporting organizations and infrastructure.
Table 3 and 4 summarize the main sources of financing for the implementation of the Strategy, including the Company's own revenues, and the main expected areas of spending. The final amounts and budget should be clarified based on the results of the development and coordination of the Company’s long-term development program, taking into account the fact that there is a list of new projects for which more funding is needed than is currently provided.
Table 3. Evaluation of resources for the implementation of the Strategy (billion rub.) *, **
Resources
2022
2023-2025
2026-2030 2022-2030
1. Targeted allocation of budget investments
including the budgetary balances previously provided to the Company for the establishment of SEZ infrastructure at the beginning of the relevant periods
2. Investment support funds
including the balances of budget allocations previously provided to the Company for the implementation of investment projects outside the SEZ at the beginning of the relevant periods
3. Subsidy for the maintenance of the Company
4. Tourism development grant
5. Investment income
6. Revenues from ski passes, rent
7. Revenues from the sale of 25% shares of JSC "UK Arkhyz"
9
9
0
15
0,7
0,2
0,3
2
0,0
28
7
4
10
1,9
0,9
1,7
4
5,7
26
0
25
3
2,3
1,5
6,6
11
0,0
63
9
29
15
4,8
2,6
8,3
17
5,7
30
Resources
8. Income from deposits
Total financial support including balances at the start of the respective periods. Total financial support excluding balances at the start of the respective periods.
2022
2023-2025
2026-2030 2022-2030
1,0
37
13
1,4
63
47
0,0
74
72
2,4
156
132
Notes: * Final amounts for the resource support of the strategy should be adjusted after approval of the long-term development program of the Company. ** Total limits of budget obligations: 2022 St Petersburg. – 10 billion rub., 2023-2025 Gov. – 29 billion rub., 2026-2030 Gov. – 55 billion RUB (subject to preservation of average annual limits of budget obligations for previous periods), 2022-2030 Gov. – 94 billion rub. The additional budget requirement for the federal budget 5 billion The rupees that are required 2023 – 2025 Total expenditure Total own income for the period 2022 – 2030 Mr. Will 33 billion roubles.
Table 4. Assessment of the expenditure of funds in the areas of the Company's activities 2030 years (billion rub.)
Areas
2022
2023-2025
2026-2030 2022-2030
1. Priorities of the Strategy
1.1. Developer of growth points
1.2. Shareholder-investor, financial consultant and investor of "breakthrough" and large projects
1.3. Developer of standard solutions and business consultant for small and medium-sized businesses
1.4. Marketing Agency
1.5. Personnel operator
1.6. Organizer of socially oriented practices 2. Expenses for the maintenance of resorts and the Society
Total expenditure
17
12
5
0
0,05
0
0
3
20
54
39
15
0,3
0,2
0,2
62
32
27
2,1
0,8
0,1
134
83
47
2,4
1,1
0,3
0,002
0,005
0,007
7
62
12
74
22
156
Regional
In addition to financial resources for the implementation of the Strategy, administrative resources of federal executive bodies and local executive self-government are used. The attraction of this type of resources is carried out in the framework of cooperation and existing and interaction both of a general nature, and in connection with the implementation of individual projects.
Legislation
treaties
bodies
bodies
The authorities,
About
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32
8. Motivation system and key performance indicators of the Company for the implementation of the Strategy
The motivation system of the Company’s personnel is aimed at achieving the Company’s strategic goals and objectives. It is based on the following principles:
• Transparency and openness to all employees; • Combination of tangible and intangible instruments; • assistance
Achievements
High
Productivity
Labor
and performance;
• assistance in achieving high quality of activity; • assistance in maintaining and increasing employee loyalty; • assistance in attracting qualified employees to the organization; • accounting of the degree of achievement of goals (KPI) of the organization as a whole, structural
departments and employees directly;
• allocation of constant and variable parts of material remuneration, and determination of their optimal ratio for various categories of employees; • periodic motivation;
Intangible
Tools
Update
System
• Building an attractive employer brand; • Formation, maintenance and development
modern corporate culture, which is based on the following values: responsibility for the result; proactive position; customer orientation; welcoming changes; self-improvement.
Changes and based on:
Motivation systems are produced as needed
• analysis
Levels
achievements
Strategic
Objectives
organizations
over a number of years;
• Employee satisfaction analysis conducted
on a periodic basis;
• Analysis of changes (innovations) in the practice of applying motivational measures
in other companies and organizations;
• analysis of the dynamics of vacancies and qualifications of applicants for vacant positions to assess the competitiveness of working conditions in the Company regarding the working conditions of other companies searching for similar personnel.
In order to determine the key performance indicators of the Company for the implementation of the Strategy, the following management objects were selected:
• finances of the Company; • operating activities of the Company; • beneficiaries
Face
the University of London
entrepreneurs,
Executors
investment activities in the NCFD;
• beneficiaries represented by the regions of the North Caucasus Federal District, in whose territory
projects are being implemented with the participation of KAVKAZ.RF JSC;
• Beneficiaries
the Ministry 's
Economic Development
The Russian Federation is the sole shareholder of the Company.
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These control objects form three groups of control processes:
1. Management of the internal environment of the Society; 2. Management of the Company’s Direct Environmental Impact; 3. Management of the external environment of the indirect impact of the Society.
Based on the analysis of the set of objects and management processes, 3 groups of key indicators of the Company’s performance are allocated:
• financial and economic performance of the Company
Order of the Government of the Russian Federation No. 28.12.2020 of 3579-r;
• the NCFD Development Strategy 's 2030 years; • indicators of the Company's Strategy.
The key targets of the Company’s activities in relation to management facilities and methods of measuring KPIs are presented in the table below.
Table 5. Key performance indicators of the Company for the implementation of the Strategy
Indicators of achievement of the objectives of the Strategy of socio-economic development of the North Caucasus Federal District up to 2030
№
Indicators
2022
2023
2024
2025
2026
2027
2028
2029
2030
1.
1.1.
The number of direct and indirect jobs created and saved by SEZ residents and within the framework of investment projects implemented with the participation of KAVKAZ.RF (accumulated), jobs
These include:
The number of direct created and saved jobs by SEZ residents and within investment projects implemented with the participation of KAVKAZ.RF (accumulated total), places
6 000 7 400 9 500 14 300 18 700 26 200 38 900 54 900 71 600
1 755
2 200 2 800 4 200 5 500
7 700 11 200 16 000 27 000
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№
Indicators
2022
2023
2024
2025
2026
2027
2028
2029
2030
2.
Number of tourists who visited tourist sites created with the participation of JSC "KAVKAZ.RF", thousand people *
The share of extra-budgetary investments attracted with the assistance of KAVKAZ.RF to the physical volume of investments in fixed assets, except for investments of infrastructure monopolies (federal projects) and budget allocations of the federal budget, by 2020, %
Average rank of the regions of the North Caucasus Federal District in terms of investment risk within the rating of RAEX investment attractiveness of the regions of the North Caucasus Federal District, place
3.
4.
1 250 1 400 1 500 1 750
2 100
2 600 3 000
3 500
4 000
1,4
2,7
4,9
7,0
10,5
15,1
20,3
25,6
30,5
81
77
73
70
66
62
58
54
50
35
Indicators of achievement of the objectives of the Company Strategy
№
Indicators
2022
2023
2024
2025
2026
2027
2028
2029
2030
Ratio of attracted extra-budgetary investments in projects in the territory of the North Caucasus Federal District to the investments of Kavkaz.RF JSC within the framework of the investment policy, rub/ 1 rub. Society
Ratio of attracted extra-budgetary investments of SEZ residents to the investments of KAVKAZ.RF JSC in the development of SEZ infrastructure, rub. / 1 rub. Society
The volume of attracted investments of federal development institutions with the assistance of KAVKAZ.RF JSC, RUB million
5 .
6 .
7 .
0,6 **
0,2 **
0,6
1,4
1,7
2,3
3,3
4,5
4,5
4,5
0,3
0,8
1,3
3,6
4,8
5,1
5,3
5,5
0
1 000
3 000
5 000
8 000
10 000
13 000
18 000
25 000
Financial and economic indicators (according to the order of the Government of the Russian Federation from 28.12.2020 No 3579-r)
8.
9.
Operating expenses to assets under management (Cost to assets), %
Profitability ratio of investments in resorts (EBITDA / Investments), %
1,5
1,5
1,5
1,5
1,5
1,5
1,5
1,5
1,5
2
3
3
3
3
4
4
5
5
Notes: * Including an estimate of the number of tourists visiting the all-season tourist and recreation complex "Archyz". ** The average value for the period 2020 – 2022 Gov.
36
The implementation of the Strategy of KAVKAZ.RF JSC will contribute to the implementation of the Strategy for the Development of the North Caucasus Federal District until 2030 and the Strategy for the Development of Tourism in the Territory of the North Caucasus Federal District until 2035. Support for new projects and implementation of priority initiatives will accelerate the growth rate of investment in fixed assets, increase employment in the economy, increase the average per capita income of the population living in the territory of the North Caucasus Federal District, implement projects to develop the urban environment in cities and rural settlements, and ultimately improve the quality of life of the population of the macro-region. In the field of tourism, new resorts will be created, priority tourist areas will be developed, as well as extrabudgetary investments will be attracted in the development of tourist infrastructure and room fund, new jobs will be created.
Implementation of the Strategy of KAVKAZ.RF will ensure 8 % the total number of new (direct) jobs created before 2030 the implementation of "breakthrough" investment projects that are part of the models of economic development of the regions of the North Caucasus Federal District, approved 26 November 2021 Chairman of the Government of the Russian Federation M.V. Mishustin, as well as provide 23 % The total amount of extra-budgetary investments that will be made before 2030 the Year of Implementation of “Breakthrough” Investment Projects.
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9. Risk management of Strategy implementation
When implementing the Strategy, the Company takes into account the main risks that may complicate the solution of the tasks for the development of the NCFD facing the Company.
Table 6. The main risks of implementing the Strategy
Type of risk
Description
Degree of influence
Probability of attack
Management tools
Increasing sanctions pressure on the Russian Federation and the deterioration of macroeconomic indicators of the country's development, as a result of the reduction of financial opportunities for financing activities for the development of the Northern Federal District, including budget funds from the federal budget, and the implementation of projects of the Company
1.
Economic risks
High
High
2.
Financial risks
3.
Market Risks
Low efficiency of projects implemented in the territory of the NCFD, as a result of the lack of payback of projects, tax returns and return on investment
Reduction of domestic demand for goods and services produced and rendered in the territory of the North-Eastern Federal District, as a result of a decrease in the level of incomes of the population, changes in the price situation, geopolitical changes
High
High
High
Average
Search for new contractors from friendly countries. Assistance in reorienting the supply of expert-import products, in changing logistics chains.
Attraction of additional sources of financing and investment resources for the implementation of projects, conclusion of agreements with financial institutions, federal development institutions and large corporations to support and implement projects in the territory of the NCFD
Project management, project selection and support tools, involvement of federal development and financial institutions for project evaluation
Active PR campaign to promote the North Caucasus Federal District and improve the image of the region, cooperation and attracting large investors, support and implementation of advanced standards and services in tourism and the service sector
39
№
Type of risk
Description
Degree of influence
Probability of attack
Management tools
Decrease in the level of state and municipal administration in the territory of the federal district
4.
Political risks
Average
Average
5.
Legal risks
6.
Social risks
Deterioration of business conditions, which may lead to the departure of part of the business in the shadow sector of the economy, employment decline
loss of income, or other undesirable and
socially unacceptable business results
(until it is terminated), related to the observance of social rights,
guarantees and interests of individuals, communities and society as a whole
Low
Average
Average
Low
Building systemic relations with regional executive bodies and regional development institutions, participation and organization of additional professional programs for advanced training and professional retraining Financial instruments for project support, promotion of "typical ready-made solutions" for business, training programs for business
Making changes to the motivation system of the company and (or) wages, aimed at reducing social tension in the workforce.
Monitoring of social processes in the territories of the Company's projects
Active PR-support of the Company’s activities and projects implemented with its participation.
Monitoring and control of compliance with ESG- principles of the Company’s activities
40
41
10. Monitoring and monitoring the implementation of the Strategy
The implementation of the Strategy is monitored by regular monitoring of its implementation, during which the planned values of the Company’s key performance indicators for the implementation of the Strategy are compared with the actual ones. System monitoring involves conducting a comprehensive analysis of the Company’s main activities for the reporting year, assessing the achievement of the Company’s key performance indicators for the implementation of the Strategy, as well as the implementation of the activities of the Action Plan for the implementation of the Strategy.
Monitoring is carried out annually on the basis of the results of the Company’s work. In case of deviations of actual indicators from the target parameters, a list of corrective measures is carried out.
Nonconformities
Development
Reasons
analysis
and
The Strategy is updated taking into account the directives of the Government of the Russian Federation, the implementation of the strategy of socio-economic development of the North Caucasus Federal District until 2030, as well as other strategic documents of the development of the Russian Federation and the North Caucasus Federal District.
Adjustment based on the results of individual stages based on monitoring data.
« Developed
Events
Strategies
Implemented
The monitoring system and the necessary adjustment of the Strategy are formed on the basis of the official statistical reporting of Rosstat, information and analytical materials of the Company, as well as materials received from subsidiaries, federal and regional development institutions, the Russian regional federations that are members of the North-Eastern Federal District.
Executive
Subjects
bodies
Authorities
Based on annual monitoring, no later than 15 February the year following the reporting year, a report on the implementation of the Strategy and the implementation of the action plan is prepared with proposals for its adjustment.
42
43