Magnit announces results of its BOD meeting held on March 20, 2014

Krasnodar, Russia, 2014-3-20 — /EPR Retail News/ — OJSC “Magnit”, Russia’s largest retailer (the “Company”, “Issuer”; MICEX and LSE: MGNT), is pleased to announce the results of the BOD meeting held on March 20, 2014.

Please be informed that on March 20, 2014 the BOD meeting was held (minutes of the BOD meeting of OJSC “Magnit” are w/o No. of March 20, 2014).

The meeting agenda:
1. Determination of OJSC “Magnit” business priorities.
2. Approval of the related party transactions.
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: A. Arutyunyan, V. Butenko and K. Pombukhchan. S. Galitskiy, A. Zayonts, A. Makhnev and A. Shkhachemukov provided their written 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 written opinions of S. Galitskiy, A. Zayonts, A. Makhnev and A. Shkhachemukov amounts to not less than half of the number 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 decisions and voting results:

Item 1 on the agenda:
“To determine OJSC “Magnit” business priorities by means of ratification of the Plans of financial and economic activity of the Company for the second quarter of 2014”.

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 2.1 on the agenda:
“To approve the real estate lease agreement which the Company plans to execute in future with JSC “Tander” and which is the related party transaction with the following essentials:
• Parties of the transaction: Lessor – OJSC “Magnit”, Lessee – JSC “Tander”.
• Subject of the transaction: the Lessor shall provide the following real property to the Lessee for a fee for temporary possession and use: non-residential premises №39 with the total space of 31.1 sq. m, located on the 1st floor of the non-residential office building with the total space of 8,193.9 sq. m, letter B, B1, number of floors: 6, number of underground floors: 1, located at the address: 15/5 Solnechnaya street, Prikubanskiy district, Krasnodar, Krasnodar region, Russia. The real property shall be provided to the Lessee for the organization of a medical room.
• Lease fee: 18,349 (eighteen thousand three hundred and forty nine) rubles per month including VAT and shall be calculated as a lease fee rate of 590 rubles per square meter of the space of the non-residential premises.
• Lease period: 360 (three hundred and sixty) calendar days. If neither of the parties announces its intention to cancel the agreement before its expiration, the agreement shall be considered prolonged for an indefinite period.

The price of the property to the possible disposal of which the transaction is related amounts to less than 2% of the book value of assets of the Company determined on the basis of the accounting statements for the latest accounting period”.

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 2.2 on the agenda:
“To approve the real estate lease agreement which the Company plans to execute in future with JSC “Tander” and which is the related party transaction with the following essentials:
• Parties of the transaction: Lessor – OJSC “Magnit”, Lessee – JSC “Tander”.
• Subject of the transaction: the Lessor shall provide the following real property located at the address: 15/5 Solnechnaya street, Prikubanskiy district, Krasnodar, Krasnodar region, Russia, to the Lessee for a fee for temporary possession and use:
– part of the non-residential office building with the total space of 8,193.9 sq. m, letter B, B1, number of floors: 6, number of underground floors: 1, excluding the non-residential premises №39 (1st floor, with the total space of 31.1 sq. m), №№26-30 (3rd floor, with the total space of 129.8 sq. m), №2, №5 (5th floor with the total space of 49.3 sq. m), the total space of the leased premises amounts to 7,983.7 sq. m;
– boiler room, purpose: non-residential, with the total space of 61.6 sq. m, letter G12, number of floors: 1;
– garage, purpose: non-residential, with the total space of 337.5 sq. m, letter G11, number of floors: 1.
The real property shall be provided to the Lessee for the use as office and service premises.
• Lease fee:
– For the Building: 4,710,383 (four million seven hundred and ten thousand three hundred and eighty three) rubles per month including VAT and shall be calculated as a lease fee rate of 590 rubles per square meter of the space of the Building.
– For the Boiler room: 24,713 (twenty four thousand seven hundred and thirteen) rubles 92 kopecks per month including VAT and shall be calculated as a lease fee rate of 401.2 rubles per square meter of the space of the Boiler room.
– For the Garage: 135,405 (one hundred and thirty five thousand four hundred and five) rubles per month including VAT and shall be calculated as a lease fee rate of 401.2 rubles per square meter of the space of the Garage.

• Lease period: 11 (eleven) months. If neither of the parties announces its refusal to prolong the agreement before its expiration, the agreement shall be considered prolonged automatically for the same period and with the same essentials.
The price of the property to the possible disposal of which the transaction is related amounts to less than 2% of the book value of assets of the Company determined on the basis of the accounting statements for the latest accounting period”.

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 recommend the sole executive body of OJSC “Magnit”, which is the sole shareholder of JSC “Tander”, to make the following decision at the realization of the voting right on shares owned by the Company: “Under the clause 14.2 of the Charter of JSC “Tander” to approve the conclusion of the Credit agreement on the opening of the credit line by JSC “Tander” (hereinafter – the “Borrower”) with “Gazprombank” (open joint-stock company) (hereinafter – the “Creditor”), which the Borrower plans to execute in future, related to acquisition, disposal and an opportunity of the company to dispose property, directly or indirectly, the cost of which amounts to 5 and more percent of the balance sheet value of assets of the company, its subsidiaries, principal company (of which the company is a subsidiary), as well as other subsidiaries of the principal company (“Group”), determined on the basis of the latest available IFRS consolidated report of the Group with the following essentials of the Credit agreement:

1. The Creditor shall open the Credit line to the Borrower and provide Credit Tranches (part of the Credit provided within the Credit line) in the amount and on terms specified in the Credit agreement, and the Borrower shall repay the Credit received through the Credit line, pay interest and fulfill other Obligations under the Credit agreement.
2. Purpose of the Credit: financing of the current operations stipulated in the Charter.
3. Interest rate for the Credit use comprises not more than 12% (twelve percent) per annum.
4. Limit of indebtedness on the Credit line (maximum amount of the aggregate debt on the Credit line) comprises 15,000,000,000 (fifteen billion) rubles.
5. Use of the Credit line is performed by the Credit Tranches each being provided for the term not exceeding 36 (thirty six) months taking into account the term of validity of the Credit agreement.
6. The term of validity of the Credit agreement amounts not more than 42 (forty two) months.

Hereby to provide V. Gordeychuk, Chief executive officer of JSC “Tander”, with the right to sign Additional agreements which determine the terms of the Credit provision and change terms of the General agreement including but not limited to the change of the interest rates, the change of the term of credit provision.”

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: post@gw.tander.ru
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: Chistyak@gw.tander.ru
Office: +7-861-277-4554 x 15101
Mobile: +7-961-511-0202
Direct Line: +7-861-277-4562

Company description:
Magnit is Russia’s largest retailer. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of December 31, 2013, Magnit operated 22 distribution centers and over 8,000 stores (7,200 convenience, 207 hypermarkets, and 686 cosmetics) in more than 1,868 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the unaudited IFRS management accounts for 2013, Magnit had revenues of $18,202 million USD and an EBITDA of $2,032 million USD. 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 credit rating from Standard & Poor’s of BB. Measured by market capitalization, Magnit is now Europe’s 2nd largest
retailer