New governmental contract

For immediate release

LSR Group wins a governmental auction to build housing for public needs

CJSC DSK Blok, a subsidiary of LSR Group (LSE: LSRG; MICEX, RTS: LSRG), was declared a winner of the auction held by the Сonstruction Committee of St. Petersburg to design and build three residential panel buildings for public needs of St. Petersburg with a total area of flats of 110 thousand square meters. The total value of the governmental contract amounted to RUR 3,578,330,218.

As a general contractor DSK Blok will design and build three residential panel buildings in the Moscow district of St. Petersburg using its own reinforced concrete items, and also build offsite utility networks to the connection points.

According to the auction terms, the project completion date is not later than the end of the 1st quarter 2011.

Note to Editors:

CJSC DSK Blok is one of the St. Petersburg panel construction market leaders in the manufacture and construction of prefabricated panel 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" In 2008, the company was awarded the title of "Best Building Contractor for the Needs of St. Petersburg's Public Procurement".

OJSC LSR Group is a real estate development and building materials company founded in 1993 and operating in a number of complementary market segments. Its core business areas are production of building materials, real estate development and panel construction. LSR Group's main operations are located in St. Petersburg, Moscow, Yekaterinburg and Ukraine. In 2009, the sales revenues of LSR Group were RUR 51,024 (IFRS).

For more details please contact:

LSR Group Press Service

Tel.: +7 812 314 10 44 Fax: +7 812 458 83 72

E-mail: [email protected]

www.lsrgroup.ru