MGNT.L Regulatory News (MGNT)

PJSC MAGNIT - BoD Meeting Results

PR Newswire

London, December 17

Press-release

Krasnodar

December 17, 2015

PJSC “Magnit” Announces the Results of the BOD Meeting

Krasnodar, December 17, 2015: PJSC “Magnit”, Russia’s largest food retailer (the “Company”, “Issuer”; MOEX and LSE: MGNT), is pleased to announce the results of the BOD meeting held on December 16, 2015.

Please be informed that on December 16, 2015 the BOD meeting was held (minutes of the BOD meeting of PJSC “Magnit” are w/o No. of December 17, 2015).

The meeting agenda:

Ratification of the PJSC “Magnit” Code of business ethics.

Termination of appointment of the head of the PJSC “Magnit” Internal audit department.

Appointment of the head of the PJSC “Magnit” Internal audit department.

Ratification of the business plan of PJSC “Magnit” Internal audit department for the year 2016.

Approval of the related party transactions.

Determination of the position of the PJSC “Magnit” representative at the exercise of the voting right on the JSC “Tander” shares owned by the Company.

Determination of the position of the PJSC “Magnit” representative at the exercise of the voting right on shares in the charter capital of LLC “Tandem” owned by the Company.

The following BOD members were present: S. Galitskiy, A. Arutyunyan, and A. Shkhachemukov.

K. Pombukhchan, A. Aleksandrov, A. Zayonts and A. Pshenichniy provided their written opinions on the items of the agenda of the BOD meeting of PJSC “Magnit”.

The number of the BOD members participating in the meeting, including written opinions ofK. Pombukhchan, A. Aleksandrov, A. Zayonts and A. Pshenichniy, 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.

Voting Results:

Items 1 – 4, 6.1 – 6.3, 7:

A. Arutyunyan – “for”, S. Galitskiy – “for”, A. Zayonts - “for”, A. Aleksandrov - “for”, K. Pombukhchan - “for”, A. Shkhachemukov – “for”, A. Pshenichniy – “for”.

The decisions were made.

Items 5.1 – 5.2:

A. Arutyunyan – “did not participate in voting”, S. Galitskiy – “did not participate in voting”, A. Zayonts - “for”, A. Aleksandrov - “for”, K. Pombukhchan - “for”, A. Shkhachemukov – “for”, A. Pshenichniy – “for”.

The decisions were made.

Content of the decisions and voting results:

Item 1 on the agenda:

“To ratify the Code of business ethics of Public Joint Stock Company “Magnit”.

Item 2 on the agenda:

“To terminate the appointment of Dmitriy Filatov, head of the PJSC “Magnit” Internal audit department”.

Item 3 on the agenda:

“To appoint Elena Kovalyova as a head of the PJSC “Magnit” Internal audit department”.

Item 4 on the agenda:

“To ratify the business plan of PJSC “Magnit” Internal audit department for the year 2016”.

Item 5.1 on the agenda:

“To approve the loan agreement (several related loan agreements) which the Company plans to execute in future with Limited liability Company “Selta” and which is the related party transaction with the following essentials:

1. parties of the transaction (transactions): the lender – PJSC “Magnit”, the borrower – LLC “Selta” (Taxpayer Identification Number 2310053662, location: 15/5 Solnechnaya street, Krasnodar, Krasnodar krai);

2. subject of the transaction (transactions): loan of funds;

3. maximum price (amount) of the transaction (transactions): not more than 52,700,000 (Fifty two million seven hundred thousand) rubles;

4. loan interest rate (per annum): not more than 125 (One hundred and twenty five) percent of the key interest rate of the Bank of Russia (published on the official website of the Bank of Russia on the Internet (www.cbr.ru) as of the loan issue date;

5. time limit for the fulfillment of obligations under the transaction (transactions): up to 3 (Three) years from the time of its execution (the time of repayment of the loan amount and interest).

The price (money value) of the Company’s property, which can be directly or indirectly disposed by the Company under the loan agreement (several related loan agreements), amounts to less than 2 percent of the book value of the Company’s assets, determined by the financial statements as of the last reporting date”.

Hereby to provide the Chief Executive Officer of PJSC “Magnit” with the right to sign the additional agreements to the loan agreement (several associated loan agreements), which change the terms and conditions of the loan agreement, including but not limited to the change of the interest rates, the loan amount and the term of the loan provision within the limits hereof”.

Item 5.2 on the agenda:

“To approve the sale and purchase agreement (several related sale and purchase agreements), which the Company plans to execute in future with Join Stock Company “Tander” and which is the related party transaction with the following essentials:

1. parties of the transaction (transactions): buyer – PJSC “Magnit”, seller – JSC “Tander”;

2. subject of the transaction (transactions): the Buyer shall accept and pay and the Seller shall transfer office supplies, desktop computers, office furniture (hereinafter – the Goods) to the possession of the Buyer pursuant to the terms and conditions stipulated in the agreement. The name, quantity and requirements applicable to the Goods shall be stipulated in the specification to the agreement.

3. maximum price (amount) of the transaction (transactions): not more than 250,000 (Two hundred and fifty thousand) rubles, including VAT.

The price (money value) of the Company’s property, which can be directly or indirectly disposed by the Company under the sale and purchase agreement (several related sale and purchase agreements), amounts to less than 2 percent of the book value of the Company’s assets, determined by the financial statements as of the last reporting date.

Hereby to provide the Chief Executive Officer of PJSC “Magnit” with the right to sign the additional agreements to the sale and purchase agreement (several associated sale and purchase agreements), which change the terms and conditions of the agreement, including but not limited to the change of the amount of the agreement within the limits hereof”.

Item 6.1 on the agenda:

“To recommend the sole executive body of PJSC “Magnit”, which is the sole shareholder of JSC “Tander”, to make the following decision at the realization of the voting right on JSC “Tander” shares owned by PJSC “Magnit”:

“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 (hereinafter – the Credit agreement) by JSC “Tander” (hereinafter – the Borrower) with “Gazprombank” (Joint Stock company) (hereinafter – the Creditor), related to acquisition, disposal and possible direct or indirect company's disposal of the property, the cost of which amounts to 5 and more per cent of the balance sheet value of assets of the company, its subsidiaries, the principal company (in relation to which the company is a subsidiary), as well as other subsidiaries of the principal company (the “Group”), determined on the basis of the latest available consolidated statements of the Group, prepared in compliance with the International Financial Reporting Standards with the following essentials:

1. The Creditor shall open the Credit line for the Borrower and provide the credit tranches (part of the credit provided within the credit line) in the amount and under the terms and conditions specified in the Credit agreement, and the Borrower shall repay the credit received under the credit line, pay interest and fulfill other obligations under the Credit agreement;

2. The limit of indebtedness under the credit line (maximum amount of the aggregate debt under the credit line) shall amount to not more than 30,000,000,000 (Thirty billion) rubles;

3. The term of provision of each credit tranche shall amount to not more than 36 (Thirty six) months;

4. The interest rate for the credit use shall amount to not more than 35% (Thirty five) percent per annum;

5. Final date of repayment of the indebtedness under the credit line – April 19, 2019 (inclusive).

6. Terms, procedure of issuance and repayment of the credit amounts, interest and other payments shall be determined by the Credit agreement.

Hereby to provide the Chief Executive Officer of JSC “Tander” with the right to sign the additional agreements, which change the terms and conditions of the Credit agreement, including but not limited to the change of the interest rates, the credit amount and the term of the credit provision within the limits hereof”.

Item 6.2 on the agenda:

“To recommend the sole executive body of PJSC “Magnit”, which is the sole shareholder of JSC “Tander”, to make the following decision at the exercise 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 additional agreement, which the Company plans to execute in the future, to the Agreement on the procedure of the conclusion of the Credit transactions with the use of the remote banking system No. £-714000/2010/00098 of 17.12.2010 (hereinafter – the Credit agreement) between JSC “Tander” (hereinafter – the Borrower) and VTB Bank (Public Joint Stock Company) (hereinafter – the Creditor), related to acquisition, disposal and possible direct or indirect company's disposal of the property, the cost of which amounts to 5 and more percent of the balance sheet value of assets of the company, its subsidiaries, the principal company (in relation to which the company is a subsidiary), as well as other subsidiaries of the principal company (the “Group”), determined on the basis of the latest available IFRS consolidated report of the Group, prepared in compliance with the International Financial Reporting Standards with the following essentials:

1. The Credit agreement regulates general terms and procedure for the conclusion of the credit transactions on the provision of credit to the Borrower by the Creditor with the use of the remote banking system, the procedure for the payment settlements by the parties under the credit transactions, as well as liability of the parties for the failure to perform obligations under the concluded credit transactions.

2. According to the Credit agreement the parties shall conclude the credit transactions in the Russian rubles.

3. The maximum term of the individual credit granted under the credit transaction shall not exceed 365 (Three hundred and sixty five) days from the provision date of the Credit.

4. The total amount of Credits, which can be provided by the Creditor under the Credit agreement, as of any date shall not exceed 36,000,000,000 (Thirty six billion) rubles.

5. The interest rate for the credit use shall be determined by the parties of the Credit agreement upon approval of the material conditions of the Credit transaction. The interest rate for the credit use over 180 (One hundred and eighty) days can be fixed and/or floating.

The floating interest rate is calculated by the Bank as the key rate of the Bank of Russia (the key rate published on the official website of the Bank of Russia on the Internet (www.cbr.ru)), increased by the markup in percent per annum, stipulated in the Borrower’s application form for the credit and approved by the Creditor.

6. The interest rate under each individual credit shall not exceed:

26 (Twenty six) percent per annum for the credits granted at the fixed interest rate;

the Key interest rate of the Bank of Russia plus 15 (Fifteen) percent per annum, in total not more than 26 (Twenty six) percent per annum for the credits granted at the floating interest rate.

7. The Credit agreement is valid until December 25, 2019. Should neither party of the Credit agreement express a written intention to terminate the Credit agreement within 5 (Five) working days until the expiry of this term, it shall be considered as automatically prolonged for every year thereafter.

8. Conditions of conclusion of the Credit transactions, procedure of granting and repayment of the credit amounts, including the procedure of determination of the interest rate for the credit use shall be determined by the Credit agreement.

Hereby to provide the Chief Executive Officer of JSC “Tander” with the right to sign the additional agreements, which change the terms and conditions of the Credit agreement, including but not limited to the change of the interest rates, the credit amount and the term of the credit provision within the limits hereof”.

Item 6.3 on the agenda:

“To recommend the sole executive body of PJSC "Magnit", which is the sole shareholder of JSC “Tander”, to make the following decision at the exercise of the voting right on the JSC “Tander” shares owned by the Company:

“To pay dividends on ordinary registered shares of JSC “Tander” following the results of the nine months of 2015 reporting year in the amount of 5,000,000,000 (Five billion) rubles, which amounts to 0.50 (Zero point five zero) rubles per one ordinary share. To determine the following record date: December 28, 2015. To pay dividends in monetary funds in accordance with the procedure and within the time limit established by the legislation of the Russian Federation”.

Item 7 on the agenda:

“To recommend the sole executive body of PJSC "Magnit", which is the sole shareholder of LLC “Tandem”, to make the following decision at the exercise of the voting right on shares in the charter capital of LLC “Tandem” owned by the Company:

“To ratify the Charter of LLC “Tandem” in the new edition”.

For further information, please contact:

Company description:

Magnit is Russia's largest food retailer. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of September 30, 2015, Magnit operated 29 distribution centers and about 11,400 stores (9,246 convenience, 335 hypermarkets, and 1,807 drogerie stores) in 2,297 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the reviewed IFRS consolidated financial statements for 1H 2015, Magnit had revenues of RUB 455 billion and an EBITDA of RUB 49 billion. Magnit's local shares are traded on the Moscow Stock Exchange (MOEX: 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 one of the largest retailers in Europe.