Results of BoD Meeting

Press-release Krasnodar September 12, 2014 OJSC "Magnit" Announcesthe Results of the BOD Meeting Krasnodar, September 12, 2014: OJSC "Magnit", Russia's largest food retailer(the "Company", "Issuer"; MICEX and LSE: MGNT), is pleased to announce theresults of the BOD meeting held on September 12, 2014. Please be informed that on September 12, 2014 the BOD meeting was held (minutesof the BOD meeting of OJSC "Magnit" are w/o No. of September 12, 2014). The meeting agenda: 1. Approval of the related party transactions. 2. Determination of the position of the OJSC "Magnit" representative at the exercise of the voting right on the Retail Import LLC shares in the charter capital owned by the Company. 3. 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: S. Galitskiy, K. Pombukhchan and A.Shkhachemukov. A. Arutyunyan, A. Zayonts, A. Makhnev and A. Pshenichniy and provided theirwritten opinions on the items of the agenda of the BOD meeting of OJSC"Magnit". The number of the BOD members participated in the meeting, including writtenopinions of A. Arutyunyan, A. Zayonts, A. Makhnev and A. Pshenichniy andamounts to not less than half of the number of the BOD members determined bythe Charter of the Company. Quorum to hold the BOD meeting with this agenda is present. Content of the decisionsand voting results: Item 1.1 on the agenda: "To approve the additional agreement to the real estate lease agreement № NvrF/638/12 of April 13, 2012, which the Company executed with JSC "Tander" andwhich is the related party transaction based on the following terms andconditions of the lease agreement including changes introduced by theadditional agreement: 1. Parties of the transaction: Lessor - OJSC "Magnit", Lessee - JSC "Tander". 2. Subject of the transaction: the Lessor shall provide the following realproperty to the Lessee for a fee for temporary possession and use: * • non-residential building, with the total space of 293.8 sq.m., floor:1, cadastral number: 23:47:0113005:1046, located at the address: 62/2 Anapskoye shosse/Lunacharskogo str., Novorossiysk, Krasnodar krai, Russian Federation; * • non-residential building, with the total space of 192.4 sq.m., floor:1, cadastral number: 23:47:0113005:1047, located at the address: 62/2 Anapskoye shosse/Lunacharskogo str., Novorossiysk, Krasnodar krai, Russian Federation; * • non-residential building, with the total space of 326.9 sq.m., floor:1, cadastral number: 23:47:0113005:1048, located at the address: 62/2 Anapskoye shosse/Lunacharskogo str., Novorossiysk, Krasnodar krai, Russian Federation; * • non-residential building, with the total space of 716.6 sq.m., floor:1, cadastral number: 23:47:0113005:1049, located at the address: 62/2 Anapskoye shosse/Lunacharskogo str., Novorossiysk, Krasnodar krai, Russian Federation. 3. Lease fee: 1,071,070 (One million seventy one thousand seventy) rubles 00kopecks per month including VAT. 4. Lease period: 10 (Ten) years. Terms and conditions of the Additional agreement shall be applied torelationship arising prior to the date of execution of the Additionalagreement, that is from August 29, 2014. 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", S. Galitskiy - "did notparticipate in voting", A. Zayonts - "for", A. Makhnev - "for", K. Pombukhchan- "for", A. Pshenichniy - "for", A. Shkhachemukov - "for". The decision was made. Item 1.2 on the agenda: "To approve the additional agreement to the real estate lease agreement № GK/3086/12 of May 22, 2012, which the Company executed with JSC "Tander" and whichis the related party transaction based on the following terms and conditions ofthe lease agreement including changes introduced by the additional agreement: 1. Parties of the transaction: Lessor - OJSC "Magnit", Lessee - JSC "Tander". 2. Subject of the transaction: the Lessor shall provide the following realproperty to the Lessee for a fee for temporary possession and use: single-floornon-residential building, with the total space of 575.2 sq.m., withmanufacturing areas, located at the address: 52 Oktyabrskaya str., Dolzhanskayavillage, Yeysky district, Krasnodar krai, Russian Federation; 3. Lease fee: 305,592 (Three hundred and five thousand five hundred and ninetytwo) rubles 00 kopecks per month including VAT. 4. Lease period: 10 (Ten) years. Terms and conditions of the Additional agreement shall be applied torelationship arising prior to the date of execution of the Additionalagreement, that is from April 25, 2014. 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", S. Galitskiy - "did notparticipate in voting", A. Zayonts - "for", A. Makhnev - "for", K. Pombukhchan- "for", A. Pshenichniy - "for", A. Shkhachemukov - "for". The decision was made. Item 2.1 on the agenda: "To recommend the sole executive body of OJSC "Magnit", which is theshareholder of LLC "Retail Import", to make the following decision at theexercise of the voting right on shares in the charter capital of LLC "RetailImport" owned by the Company: "To approve the future execution of the major transaction - bank guaranteeagreement (hereinafter - the Agreement) between the Company and Openjoint-stock company "Sberbank of Russia" represented by the South-Western bank(hereinafter - the Guarantor) with the following essentials: 1. The Guarantor shall undertake the obligation to provide the guarantees ofthe Principal's (LLC "Retail Import") performance of obligations to theBeneficiary (customs authorities) on the use of excise stamps in accordancewith their designated purpose in the form annexed to the Agreement according tothe Federal law № 311-FZ "On Customs Regulation in the Russian Federation" ofNovember 27, 2010. 2. Throughout the term of the Agreement the total amount of the concurrentguarantees (hereinafter - the Limit) shall not exceed 300,000,000 (threehundred million) rubles. 3. The validity period of the Limit shall not exceed 36 (thirty six) months. 4. The Principal shall pay the fee per each guarantee in the amount of not morethan 4 (Four) percent per annum of the amount of each guarantee for theeffective guarantee period. 5. The Principal shall pay the Guarantor the fee for the enforced diversion ofthe funds by the Guarantor towards obligations of the Principal to theBeneficiary in the amount of not more than 15 (Fifteen) percent per annum ofthe payment effected for the corresponding guarantee. 6. In case of the Principal's late performance of the payment obligations underthe Agreement, the Principal shall pay the fee in the amount not exceeding 22.5(Twenty two point five) percent per annum of the overdue amount for each day ofdelay." Votes were cast as follows: A. Arutyunyan - "for", S. Galitskiy - "for", A. Zayonts - "for", A. Makhnev -"for", K. Pombukhchan - "for", A. Pshenichniy - "for", A. Shkhachemukov -"for". The decision was made. Item 2.2 on the agenda: "To recommend the sole executive body of OJSC "Magnit", which is theshareholder of LLC "Retail Import", to make the following decision at theexercise of the voting right on shares in the charter capital of LLC "RetailImport" owned by the Company: "To approve the Bank guarantee agreement (hereinafter - the Agreement), whichthe Company plans to execute in future with Open joint-stock company"ALFA-BANK" (hereinafter - the Bank) and which is the major transaction withthe following essentials: 1. The Bank shall issue the bank guarantees, hereinafter - the Guarantees, atthe request of LLC "Retail Import" (hereinafter - the Principal) under theAgreement and additional agreements hereto, in accordance with which the Bankshall undertake the obligation to pay the monetary amount to the creditor ofthe Principal (beneficiary) according to the terms of the Guarantee at thewritten request of the Beneficiary. 2. The Limit of the Guarantees issuance (the Limit) - the maximum amount, whichthe Bank's aggregate obligation limit may account for on any day of thevalidity period of the Limit of the Guarantees issuance: not more than1,000,000,000.00 (One billion) rubles. 3. The validity period of the Limit of the Guarantees issuance: not later thanApril 24, 2017. 4. The validity period of a single Guarantee: shall not exceed the validityperiod of the Limit of the Guarantees issuance, and shall not exceed 12(Twelve) months (inclusive). 5. Beneficiary of Guarantees: customs authorities. 6. Secured guarantee obligation: the Principal's proper performance of theobligation on the use of excise stamps in accordance with their designatedpurpose. 7. Fee for the guarantee issuance: not more than 4 % (Four) percent per annumof the limit of OJSC "ALFA-BANK" obligations under the Guarantee for itsvalidity period, but not less than 40,000 (Forty thousand) rubles. 8. Penalties: 0.5 % (Zero point five) of the amount of the overdue indebtednessfor each day of delay but not lower than the dual refinancing rate of the Bankof Russia, which is effective on the day for which penalties are charged. 9. The executed Agreement shall specify the term on the LLC "Retail Import"obligation to reimburse the amounts, paid by the Bank under all guaranteesprovided in accordance with the Agreement, to the Bank by way of recourse." Votes were cast as follows: A. Arutyunyan - "for", S. Galitskiy - "for", A. Zayonts - "for", A. Makhnev -"for", K. Pombukhchan - "for", A. Pshenichniy - "for", A. Shkhachemukov -"for". The decision was made. Item 3 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 of JSC "Tander" owned by the Company: "To allocate part of the net profit of JSC "Tander" for the 6 months of 2014financial year for dividend payment. To pay dividends on ordinary registeredshares of JSC "Tander" in the amount of 15,800,000,000 (fifteen billion eighthundred million) rubles, which amounts to 1.58 rubles per one ordinary share. To pay the dividends as follows. - payment of dividends shall be made in monetary funds in accordance with theprocedure and within the time limit established by the legislation of theRussian Federation; - to appoint the following date as of which the shareholders entitled toreceive dividends are determined: September 23, 2014." Votes were cast as follows: A. Arutyunyan - "for", S. Galitskiy - "for", A. Zayonts - "for", A. Makhnev -"for", K. Pombukhchan - "for", A. Pshenichniy - "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 x 17600 Mobile: +7-961-511-7678 Direct Line: +7-861-277-4562 Dina Svishcheva Deputy Director, Investor Relations Email: [email protected] Office: +7-861-277-45-54 x 15101 Mobile: +7-961-511-0202 Direct Line: +7-861-277-4562 Company description: Magnit is Russia's largest food retailer. Founded in 1994, the company isheadquartered in the southern Russian city of Krasnodar. As of June 30, 2014,Magnit operated 24 distribution centers and over 8,600 stores (7,614convenience, 226 hypermarkets, and 778 drogeries) in approximately 2,000 citiesand towns throughout 7 federal regions of the Russian Federation. In accordance with the reviewed IFRS consolidated financial statements for 1H2014, Magnit had revenues of $9,979 million USD and an EBITDA of $1,045 millionUSD. Magnit's local shares are traded on the Moscow Stock Exchange (MICEX:MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a creditrating from Standard & Poor's of BB. Measured by market capitalization, Magnitis one of the largest retailers in Europe.