Report from PKP Titan LLC on the incident in the 198 planning quarter of the Gorkovskое section of the Vyiskoe forestry of the Arkhangelsk region

Report from PKP Titan LLC on the incident in the 198 planning quarter of the Gorkovskое section of the Vyiskoe forestry of the Arkhangelsk region

PKP Titan LLC informs the concerned parties about the incident that took place in the forest section under the management of one our wood procurement enterprises.

In the letter No. 10/293 dated 26.11.2019 Arkhangelsk PPM JSC sent to Verkhnetoemsky Timber Industry Enterprise LLC and to PKP Titan LLC an instruction on the termination of logging in the 198 planning quarter of the Gorkovskoe section of the Vyiskoe forestry of the Arkhangelsk region.

Primary analysis promptly performed by PKP Titan LLC allows making the following conclusions:

Forest management in this quarter making part of forestry sections under the sublease contract No. 18/1786 СА dated April 13, 2018 is made by Verkhnetoemsky Timber Industry Enterprise LLC, wholly owned by PKP Titan LLC since April 27, 2018 (date of registration in the IFTS of Russia in Arkhangelsk);

Due to unfavorable weather conditions in September-October 2019 Verkhnetoemsky Timber Industry Enterprise LLC included into the production plan wood procurement in the 198 planning quarter of the Gorkovskoe forestry section with the total volume of 26,122 cub.m;

The wood procurement works in the 198 planning quarter of the Gorkovskoe forestry section were performed by Verkhnetoemsky Timber Industry Enterprise LLC by own efforts and using subcontractors.

However, wood procurement in the 198 planning quarter of the Gorkovskoe forestry section should not have been planned and performed either by Verkhnetoemsky Timber Industry Enterprise LLC or by its subcontractors, because:

PKP Titan LLC has confirmed the forest areas to be included into the Dvinsko-Pinezhsky State Nature Reserve of regional importance, in particular 198 planning quarter of the Gorkovskoe forestry section (Agreement dated April 19, 2018 on the delimitation of the anticipated Verkneyulovsky (Dvinsko-Pinezhsky) State Nature Reserve of regional importance and on the security of intact forest landscapes in-between rivers of the Northern Dvina and the Pinega);

The government of the Arkhangelsk region issued a Resolution "On creation of Dvinsko-Pinezhsky State Nature complex (landscape) Reserve of regional importance" No. 531-пп dated October 1, 2019 entered into effect on October 18, 2019.

In the letter No. 11646 dated 26.11.2019 PKP Titan LLC brought to the notice of Verkhnetoemsky Timber Industry Enterprise LLC the instruction of Arkhangelsk PPM JSC on the termination of logging in the 198 planning quarter of the Gorkovskoe section of the Vyiskoe forestry of the Arkhangelsk region.

PKP Titan LLC will additionally inform the concerned parties about further actions on the resolution of the incident and prevention of the similar incidents in the future.





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