"ASHTARAK KAT" COMPANY LAYS FIRM BUSINESS FOUNDATION

Yerevan, August 8. ArmInfo. The general assembly of shareholders of
the producer of whole milk products, "Ashtarak-Kat" CJSC, approved
the principles of the company’s corporate behavior in July 2006.

Narine Melikyan, Vice Chairwoman of "Ashtarak-Kat" Board of Directors
for Corporate Management informed ArmInfo of this practice unique
for Armenia.

Thus, the principles of corporate behavior are totality of moral and
ethical norms and principles of business activity. Adoption of these
principles and norms is a necessary but not final step in the way to
Corporate Social Responsibility (CSR).

N. Melikyan said unlike Armenia, the USA and Europe have been
practicing CSR since the middle of the 20th century. CSR is a voluntary
contribution of business to public development in social, economic and
ecological spheres directly connected with the activity of a company.

She said the principles of corporate behavior were worked out on the
basis of the major definition of CSR and human values. In addition, the
principles are based on the Declaration adopted in 1994 in Switzerland
by the leaders of the largest transnational world corporations,
as well as on the UN Global Agreement. N. Melikyan brought the
following key goals of the company: stable business, which depends
on how the company’s activity meets the expectations of consumers,
personnel, country, local authorities, shareholders, business partners
and other parties interested; vector of company’s development for
long-term outlook, which is the international market wherein socially
responsible business is a standard. Moreover, a socially responsible
business testifies to the stability and attractiveness of a company.

She said CSR is perceived as development of responsible business
advantageous both for business, state and public. Hence, social
responsibility is a trilateral interest. Thus, the public must
be aware of its demands and must form social order. The state
must exactly determine the priorities. Business, in its turn,
must effectively create economic value added (EVA), fulfill social
obligations stipulated by the law, involve more interested persons
in the corporate responsibility related measures.

N. Melikyan said building a firm business foundation is the first and
the most important phase of social responsibility for "Ashtarak-Kat."

As a result, the company aims to secure high quality production;
provide adequate work and living conditions of employees; provision
of stable wages; participation in social projects and charitable
actions. The company’s mission is not only to ensure economic growth,
but also to create a society of socially responsible citizens.

All this does not mean that the company had no problems. The principles
of corporate behavior are not a panacea for problems either. The
adoption of the principles having a human basis meant the company’s
progress as a corporate citizen whose strategy of development will
be in accord with the interests of his employees, business partners,
consumers, the economic management territory and the public, on
the whole.