BoD Results

Press-release Krasnodar August 1, 2013 OJSC "Magnit" Announces the Results of the BOD Meeting, Including the Decisionto Call the EGM and Determination of the Record Date Krasnodar, August 1, 2013: OJSC "Magnit", Russia's largest retailer (the"Company", "Issuer"; MICEX and LSE: MGNT), is pleased to announce the resultsof the BOD meeting held on July 31, 2013. Please be informed that on July 31, 2013 the BOD meeting was held (minutes ofthe BOD meeting of OJSC "Magnit" are w/o No. of July 31, 2013). The meeting agenda: 1. Approval of recommendations to the general shareholders meeting on the dividend amount on OJSC "Magnit" shares and the procedure of its payment following the 6 months of 2013 financial year results. 2. Calling of the extraordinary general shareholders meeting of OJSC "Magnit". 3. Adoption of the agenda of the extraordinary general shareholders meeting of OJSC "Magnit". 4. Approval of the form of holding of the extraordinary general shareholders meeting of OJSC "Magnit". 5. Determination of the date, time and venue of the extraordinary general shareholders meeting of OJSC "Magnit". 6. Determination of the date of the list of persons entitled to participate in the extraordinary general shareholders meeting of OJSC "Magnit". 7. Approval of the form and the text of the voting ballots on the items to be considered at the extraordinary general shareholders meeting of OJSC "Magnit". 8. Notification of shareholders of the holding of the extraordinary general shareholders meeting of OJSC "Magnit". 9. Provision of the opportunity to shareholders to review the materials related to the holding of the extraordinary general shareholders meeting of OJSC "Magnit". 10. Determination of the recommended price for the related party transaction to be approved by the general shareholders meeting of OJSC "Magnit". 11. Approval of the related party transaction. 12. Approval of the candidate to the head of the internal audit service. 13. Determination of the position of the OJSC "Magnit" representative at the exercise of the voting right on the JSC "Tander" shares owned by the Company. The following BOD members were present: A. Arutyunyan, V. Butenko, S.Galitskiy, K. Pombukhchan and A. Shkhachemukov. A. Zayonts and A. Makhnev provided their written opinions on the items of theagenda of the BOD meeting of OJSC "Magnit". The number of the BOD members participated in the meeting, including writtenopinions of A. Zayonts and A. Makhnev amounts to not less than half of thenumber of the BOD members determined by the Charter of the Company. Quorum to hold the BOD meeting with this agenda is present. Content of the decisionsand voting results: Item 1 on the agenda: "To approve recommendations to the general shareholders meeting of the Companyon the dividend amount on OJSC "Magnit" shares and the procedure of its paymentfollowing the 6 months of 2013 financial year results (annex №1 to the minutesof the BOD meeting). To determine the dividend amount according to the OJSC "Magnit" BOD'srecommendations on dividend amount on the Company's shares following the 6months of 2013 financial year as follows: - total amount of funds for dividend payment - 4,355,496,011.30 rubles; - amount of funds for dividend payment on one share - 46.06 rubles. The following procedure of the dividend payment has been recommended to thegeneral shareholders meeting of OJSC "Magnit": To determine the dividend payment period - within 60 days from the date ofmaking the decision on the dividend payment by the general shareholdersmeeting. To fulfill the dividend payment with funds via the Registrar of the Company -OJSC "Objedinennaya registratsionnaya kompaniya" as the body providing serviceson the dividend payment (Taxpayer Id. Number 7705108630, Principal StateRegistration Number 1027700036540). The dividend transfer by any means shall be fulfilled at the expenses of OJSC"Magnit". The list of shareholders entitled to receive dividends shall be made as of thedate of the list of shareholders entitled to participate in the extraordinaryGeneral shareholders meeting of OJSC "Magnit" - August 9, 2013". Votes were cast as follows: A. Arutyunyan - "for", V. Butenko - "for", S. Galitskiy - "for", A. Zayonts -"for", A. Makhnev - "for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. Item 2 on the agenda: "To call the extraordinary general shareholders meeting of OJSC "Magnit". Votes were cast as follows: A. Arutyunyan - "for", V. Butenko - "for", S. Galitskiy - "for", A. Zayonts -"for", A. Makhnev - "for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. Item 3 on the agenda: "To ratify the following agenda of the extraordinary general shareholdersmeeting of OJSC "Magnit": 1. "Payment of dividends on OJSC "Magnit" shares following the 6 months of 2013financial year results. 2. "Approval of the related party transaction". Votes were cast as follows: A. Arutyunyan - "for", V. Butenko - "for", S. Galitskiy - "for", A. Zayonts -"for", A. Makhnev - "for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. Item 4 on the agenda: "To hold the extraordinary general shareholders meeting in the form of jointpresence of shareholders to discuss the agenda items and make decisions on thevoting items with preliminary submission (delivery) of voting ballots prior tothe holding of the general shareholders meeting". Votes were cast as follows: A. Arutyunyan - "for", V. Butenko - "for", S. Galitskiy - "for", A. Zayonts -"for", A. Makhnev - "for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. Item 5 on the agenda: "To appoint the extraordinary general shareholders meeting on September 26,2013 at 11:00 AM, to appoint the registration of the meeting participants onSeptember 26, 2013 at 10:00 AM. Venue: 3-rd floor, conference hall, 15/5 Solnechnaya street, Krasnodar, Russia. To determine the address to which the completed voting ballots may bedelivered: 15/5 Solnechnaya street, Krasnodar, 350072, Russia". Votes were cast as follows: A. Arutyunyan - "for", V. Butenko - "for", S. Galitskiy - "for", A. Zayonts -"for", A. Makhnev - "for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. Item 6 on the agenda: "To authorize the registrar of the Company - OJSC "Objedinennayaregistratsionnaya kompaniya" - to make the list of persons entitled toparticipate in the extraordinary general shareholders meeting according to theregister as of August 9, 2013". Votes were cast as follows: A. Arutyunyan - "for", V. Butenko - "for", S. Galitskiy - "for", A. Zayonts -"for", A. Makhnev - "for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. Item 7 on the agenda: "To approve the form and the text of the voting ballot (annex №2 to the minutesof the BOD meeting) on agenda items to be considered at the extraordinarygeneral shareholders meeting". Votes were cast as follows: A. Arutyunyan - "for", V. Butenko - "for", S. Galitskiy - "for", A. Zayonts -"for", A. Makhnev - "for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. Item 8 on the agenda: "To approve the text of the announcement of the extraordinary generalshareholders meeting (annex №3 to the minutes of the BOD meeting) and deliverit by registered mail or to submit against signature to each shareholder of thecompany prior to August 26, 2013 inclusive". Votes were cast as follows: A. Arutyunyan - "for", V. Butenko - "for", S. Galitskiy - "for", A. Zayonts -"for", A. Makhnev - "for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. Item 9 on the agenda: "To approve the following list of information materials to be presented to theshareholders within the period of preparation for the EGM: - recommendations of the Board of Directors of the Company on the dividendamount on OJSC "Magnit" shares and the procedure of its payment following the 6months of 2013 financial year results; - information on the transaction to be approved by the general shareholdersmeeting; - draft decisions of the extraordinary general shareholders meeting on theagenda items. To authorize the sole executive body to provide access to the above mentionedinformation materials starting from September 5, 2013 from 10:00 AM to 5:00 PM(break from 12:00 PM to 1:00 PM) at the following address: 15/5 Solnechnayastreet, Krasnodar, Russia, CEO's office". Votes were cast as follows: A. Arutyunyan - "for", V. Butenko - "for", S. Galitskiy - "for", A. Zayonts -"for", A. Makhnev - "for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. Item 10 on the agenda: "Due to the fact that the loan agreement (several related loan agreements),which the Company plans to execute in future with the joint-stock company"Tander", is the related party transaction, the price of the property, to thepossible disposal of which the granting of the loan is related, is to bedetermined by the Company's Board of Directors. According to articles 77 and 83 of the Federal law as of December 26, 1995 №208-FZ "On joint-stock companies" to decide that the price (money value) of theCompany's property, which can be directly or indirectly disposed by the Companyunder the loan agreement (several related loan agreements), shall be determinedon the basis of the following terms and conditions of the agreement, which theCompany plans to execute in future: 1. Parties of the transaction (transactions): the lender - OJSC "Magnit", theborrower - JSC "Tander"; 2. Subject of the transaction (transactions): loan of funds; 3. Maximum price (amount) of the transaction (transactions): up to15,000,000,000 (fifteen billion) rubles; 4. Loan interest rate: not more than 12% (twelve per cent) per annum; 5. Time limit for the fulfillment of obligations under the transaction(transactions): up to 5 (five) years from the time of its conclusion (the timeof repayment of the loan amount and interest). The price of the property, to the possible disposal of which the loantransactions are related, comprises more than 2%, but not more than 25% of thebook value of the Company's assets, determined from the data of its financialstatements as of the last reporting date". Votes were cast as follows: A. Arutyunyan - "did not participate in voting", V. Butenko - "for", S.Galitskiy - "did not participate in voting", A. Zayonts - "for", A. Makhnev -"for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. Item 11 on the agenda: "To approve the related party transaction between OJSC "Magnit" and Joint-stockcommercial bank "Absolut Bank" (open joint-stock company), namely, theGuarantee agreements as security for the obligation of JSC "Tander" (hereafter- "the Borrower") to Joint-stock commercial bank "Absolut Bank" (openjoint-stock company) (hereafter - "the Creditor") on the basis of the followingterms and conditions: 1. Total credit limit for the Credit agreement, which the Borrower plans toexecute in future, amounts to not more than 1,000,000,000 (one billion rubles); 2. The credit is provided for the maximum of 6 (six) months; 3. Interest rate for the credit use including charges comprises not more than12% (twelve percent) per annum; 4. Terms, procedure of granting and repayment of the credit, interest and otherpayments are determined by the Credit agreement; 6. Total amount of obligation of OJSC "Magnit" out of the provided security onany day of the period of validity of the Credit agreement cannot exceed1,250,000,000 (one billion two hundred and fifty million) rubles. The price of the property to the possible disposal of which the transaction isrelated amounts to less than 2% of the book value of assets of the Companydetermined on the basis of the accounting statements for the latest accountingperiod". Votes were cast as follows: A. Arutyunyan - "did not participate in voting", V. Butenko - "for", S.Galitskiy - "did not participate in voting", A. Zayonts - "for", A. Makhnev -"for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. Item 12 on the agenda: "To approve the appointment of Dmitriy Filatov as a head of the internal auditservice of OJSC "Magnit". Votes were cast as follows: A. Arutyunyan - "for", V. Butenko - "for", S. Galitskiy - "for", A. Zayonts -"for", A. Makhnev - "for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. Item 13 on the agenda: "To recommend the sole executive body of OJSC "Magnit", which is theshareholder of JSC "Tander" to make the following decision at the exercise ofthe voting right on shares in the charter capital of JSC "Tander" owned by theCompany: "1. To establish the JSC "Tander" branch in Murmansk, Murmansk region; 2. Due to the change of the address of the JSC "Tander" branch in Arkhangelsk,Arkhangelsk region and due to the establishment of the JSC "Tander" branch inMurmansk, Murmansk region, to ratify the Charter of JSC "Tander" in the newedition". Votes were cast as follows: A. Arutyunyan - "for", V. Butenko - "for", S. Galitskiy - "for", A. Zayonts -"for", A. Makhnev - "for", K. Pombukhchan - "for", A. Shkhachemukov - "for". The decision was made. For further information, please contact: Timothy Post Director, Investor Relations Email: [email protected] Office: +7-861-277-4554 x7600 Mobile: +7-961-511-7678 Direct Line: +7-861-277-4562 Dina Svishcheva Deputy Director, Investor Relations Email: [email protected] Office: +7-861-277-4554 x5101 Mobile: +7-961-511-0202 Direct Line: +7-861-277-4562 Company description: Magnit is Russia's largest retailer. Founded in 1994 by Sergey Galitskiy, thecompany is headquartered in the southern Russian city of Krasnodar. As of June30, 2013, Magnit operates 18 distribution centers and over 7,000 stores (6,552convenience, 164 hypermarkets, and 700 cosmetics) in more than 1,700 cities andtowns throughout 7 federal regions of the Russian Federation. In accordance with the unaudited IFRS management accounts for 1H 2013, Magnithad revenues of $8,796 million USD and an EBITDA of $889 million USD. Magnit'slocal shares are traded on the Moscow Stock Exchange (MICEX: MGNT) and its GDRson the London Stock Exchange (LSE: MGNT) and it has a credit rating fromStandard & Poor's of BB. Measured by market capitalization, Magnit is nowEurope's 2nd largest retailer.