MGNT.L Regulatory News (MGNT)

PJSC MAGNIT - BoD Meeting Results

PR Newswire

London, May 28

Press-release

Krasnodar

May 28, 2015

PJSC “Magnit” Announces the Results of the BOD Meeting

Krasnodar, May 28, 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.

Please be informed that on May 28, 2015 the BOD meeting was held (minutes of the BOD meeting of PJSC “Magnit” are w/o No. of May 28, 2015).

The meeting agenda:

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.

Approval of the Regulations on the internal audit of Public Joint Stock Company “Magnit”.

Approval of the related party transaction.

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

A. Zayonts, A. Makhnev and A. Pshenichniy provided their written opinions on the tems of the agenda of the BOD meeting of PJSC “Magnit”.

The number of the BOD members participated in the meeting, including written opinions of A. Zayonts, A. Makhnev 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.

Content of the decisions and voting results:

Item 1.1 on the agenda:

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

1. To approve the annual report, the annual accounting reports of JSC “Tander” for 2014 and Profit and loss allocation of JSC “Tander” following the 2014 financial year results:

1.1. To pay dividends on ordinary registered shares of JSC “Tander” in the amount of 9,800,000,000 (nine billion eight hundred million) rubles, which amounts to 0.98 rubles per one ordinary share:

Payment of dividends shall be executed as follows:

a. to pay dividends in monetary funds;

b. to pay dividends in accordance with the procedure and within the time limit established by the legislation of the Russian Federation;

c. to appoint the following date as of which the shareholders entitled to receive dividends are determined: June 9, 2015.

1.2. Not to pay remuneration to the members of the Revision Commission of JSC “Tander”.

1.3. To leave the remaining part of the net profit unallocated.

2. To elect the following candidates to the Revision commission of JSC “Tander”:

Roman Efimenko;

Anzhela Udovichenko;

Denis Fedotov.

3. To approve the Limited Liability Company Audit firm “Faber Leks” (Taxpayer Id. Number 2308052975, location: 144/2 Krasnykn Partizan street, Krasnodar, 350049, Krasnodar region) as the auditor of JSC “Tander” in accordance with the Russian accounting standards.

4. To determine remuneration for the services of the auditor in accordance with the Russian Accounting Standards for the conduction of the audit of the accounting (financial) reports for the year 2015 in the amount of not more than 5,700,000 (five million seven hundred thousand) rubles excl. VAT”.

Votes were cast as follows:

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

The decision was made.

Item 1.2 on the agenda:

“Reappoint Vladimir Gordeychuk, the chief executive officer of joint stock company “Tander” (passport details: information is provided in accordance with the requirements of the Federal law “On personal data”) for the new term – 3 (three) years starting from July 1, 2015. To authorize Sergey Galitskiy, the representative of PJSC “Magnit” which is the sole shareholder of JSC “Tander”, to sign on behalf of JSC “Tander” the agreement on the prolongation of the employment agreement of June 28, 2006 with the sole executive body (CEO) of JSC “Tander”.

Votes were cast as follows:

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

The decision was made.

Item 1.3 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 realization of the voting right on JSC “Tander” shares owned by the Company:

“Under the clause 14.2 of the Charter of JSC “Tander” to approve the conclusion of the agreements on the opening of the revolving and (or) non-revolving credit lines (hereinafter – the Credit agreements) by JSC “Tander” (hereinafter – the Borrower) with Open joint-stock company “Sberbank of Russia” (hereinafter – the Creditor), which the Borrower plans to execute in future, 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 IFRS consolidated report of the Group, prepared in compliance with the International Financial Reporting Standards with the following essentials:

1. The Creditor shall provide the Borrower with monetary funds in Russian rubles;

2. The total credit limit for all Credit agreements, which the Borrower plans to execute in future, shall not exceed 15,000,000,000 (Fifteen billion) rubles;

3. The term of the credit use under each Credit agreement shall not exceed 3 (Three) years;

4. The interest rate for the credit use including charges shall not exceed 25 (Twenty five) percent per annum;

5. Terms, procedure of granting and repayment of the credit amounts, interest and other payments shall be determined by the relevant Credit agreements.

Hereby to provide the Chief Executive Officer of JSC “Tander” or other JSC “Tander” representatives, authorized by the CEO, with the right to sign the additional agreements to the Credit agreements, which change the terms and conditions of the Credit agreements, 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”.

Votes were cast as follows:

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

The decision was made.

Item 1.4 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 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 revolving credit line (hereinafter – the Credit agreement) by JSC “Tander” (hereinafter – the Borrower) with Joint-stock company “ALFA-BANK” (hereinafter – the Creditor), which the Borrower plans to execute in future, 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 IFRS consolidated report of the Group, prepared in compliance with the International Financial Reporting Standards with the following essentials:

The Creditor shall provide the Borrower with monetary funds in the Russian rubles (hereafter – “the Credits”) in the form of the revolving credit line (hereafter – “the Credit line”).

Within the limits of the Credit line the Borrower shall be entitled to receive Credits, the maximum amount of the aggregate debt on which on any day of the term of the Credit line comprises not more than 14,000,000,000 (Fourteen billion) rubles (“the Debt limit”).

The term of the Credit line shall not exceed 67 (Sixty seven) months from the date of the Credit agreement. The Borrower shall repay all received Credits not later than the date of expiration of the Credit line.

The Credits within the term of the Credit line shall be provided for not more than 36 (Thirty six) months.

The interest rate: not more than 35 (Thirty five) percent per annum.

Penalties: 0.1 percent of the amount of the overdue indebtedness per each overdue day, but not lower than the dual refinancing rate of the Bank of Russia effective on the day for which the penalty is charged.

The terms and procedure of granting and repayment of the Credit amounts (including the amount of any type of remuneration paid by the Borrower to the Creditor), as well as penalties for breaching the terms of the Credit Agreement by the Borrower shall be determined by the Credit agreement.

Hereby to provide the Chief Executive Officer of JSC “Tander” or other JSC “Tander” representatives, authorized by the CEO, with the right to sign the additional agreements to the Credit agreements, which change the terms and conditions of the Credit agreements, 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”.

Votes were cast as follows:

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

The decision was made.

Item 1.5 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 the Company:

“Under the clause 14.2 of the Charter of JSC “Tander” to approve the conclusion of the agreements on the opening of the revolving and (or) non-revolving credit lines (hereinafter – the Credit agreements) by JSC “Tander” (hereinafter – the Borrower) with Public joint-stock company ROSBANK (hereinafter – the Creditor), which the Borrower plans to execute in future, 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 IFRS consolidated report of the Group, prepared in compliance with the International Financial Reporting Standards with the following essentials:

1. The Creditor shall provide the Borrower with monetary funds in Russian rubles, in US dollars, in Euros;

2. The total credit limit for all Credit agreements, which the Borrower plans to execute in future, shall not exceed 28,000,000,000 (Twenty eight billion) rubles or shall be equivalent to this amount in US dollars or Euros at the exchange rate of the Bank of Russia as of the date of provision of the credit;

3. The credit shall be provided in the form of individual credits under the Credit agreements for the purpose of working capital financing and/or financing of current operations;

4. The term of the Credit agreements shall not exceed 12 (Twelve) months (inclusive) since the signing date of each agreement;

5. Each individual credit shall be provided for the period not exceeding 12 (Twelve) months;

6. The interest period for rates in US dollars, Euros and Russian rubles may be equal to any calendar period of up to 12 (Twelve) months (inclusive) if agreed by the parties of the Credit agreement;

7. The interest rate for the credit use including charges shall not exceed 30 (Thirty) percent per annum;

8. Terms, procedure of granting and repayment of the credit amounts, interest and other payments shall be determined by the relevant Credit agreements;

Hereby to provide the Chief Executive Officer of JSC “Tander” or other JSC “Tander” representatives, authorized by the CEO, with the right to sign the additional agreements to the Credit agreements, which change the terms and conditions of the Credit agreements, 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”.

Votes were cast as follows:

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

The decision was made.

Item 1.6 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 the Company:

“To approve the conclusion of the loan agreement (several related loan agreements) (hereinafter – the Transaction) by JSC “Tander” (hereinafter – the Borrower) with Public joint-stock company “Magnit”, which the Borrower plans to execute in future and which is a major transaction with the following essentials:

1. Parties of the transaction (transactions): the lender – PJSC “Magnit”, the borrower – JSC “Tander”;

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

3. Maximum price (amount) of the transaction (transactions): up to 45,000,000,000 (Forty five billion) rubles;

4. Loan interest rate (per annum): not more than 180 (One hundred and eighty) 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 JSC “Tander” property, which can be directly or indirectly disposed under the loan agreement (several related loan agreements), can amount to 25 or more percent of the book value of JSC “Tander” assets, determined by the financial statements as of the last reporting date, but not more than 50 percent of the book value of assets, determined by the financial statements as of the last reporting date.

Hereby to provide the Chief Executive Officer of JSC “Tander” or other JSC “Tander” representatives, authorized by the CEO, with the right to sign the additional agreements to the Credit agreements, which change the terms and conditions of the Credit agreements, 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”.

Votes were cast as follows:

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

The decision was made.

Item 2 on the agenda:

“To approve the Regulations on the internal audit of Public Joint Stock Company “Magnit”. To consider the Regulations on the internal control over financial and economic activity of OJSC "Magnit" approved by the Board of Directors on July 15, 2010 to be no longer in force”.

Votes were cast as follows:

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

The decision was made.

Item 3 on the agenda:

“To approve the guarantee agreement which is the related party transaction and which the Company (hereinafter – the Guarantor) plans to execute in future as security for obligations of Joint-stock company “Tander” (beneficiary) (hereinafter – the Borrower) to Public joint-stock company ROSBANK (hereinafter – the Creditor) under the additional agreement (additional agreements) to the Bank account agreement #0249018/RUB of October 25, 2007 (hereinafter – the Agreement) on the basis of the following essentials:

Under the terms and conditions of the Agreement the Creditor shall provide the credits to the Borrower within the period established by the Agreement by execution of the Borrower’s payment orders, notwithstanding insufficiency or lack of funds (crediting of the account), if the aggregate debt of the Borrower under credits provided according to this procedure does not exceed the maximum possible amount of debt of the Borrower to the Bank determined by the Agreement and resulting from crediting of the Borrower’s account as of any date within the period established by the Agreement (Overdraft limit).

Overdraft limit amounts to 375,000,000 (Three hundred and seventy five million) rubles;

Maximum payment period of each credit obtained under the Agreement: 30 (Thirty) calendar days from the date of provision of the corresponding credit.

The Borrower shall pay interest to the Creditor in the amount of MosPrime OverNight rate (indicative Moscow interbank offered rate on ruble-denominated credits (deposits) provided for the “overnight” period, which is updated on MOSPRIME= page of the information provider “Thomson-Reuters” or on the website www.mosprime.com at 12.30 (Moscow time) as of the date of the rate establishment), increased by the Bank (Creditor) Margin. The Bank Margin shall not exceed 1.8 (One point eight) percent per annum). The interest rate may be changed by the Bank unilaterally in case of the change of the Bank key rate and depending on the change of the monetary and financial market environment. The interest rate (including the Bank margin) shall not exceed 30 (Thirty) percent per annum (maximum amount of the interest rate).

Credit terms, procedure of credit providing and redemption of credit amounts, interest and other payments shall be determined by the Credit agreement

The term of the Agreement shall not exceed 1 (One) year.

Maximum price (amount) of the guarantee agreement: the aggregate amount of obligations of the Guarantor shall not exceed 490,000,000 (Four hundred and ninety million) rubles.

The price of the property to the possible disposal of which the transaction is related shall not exceed 2% of the balance sheet assets value of the company determined on the basis of the accounting statement for the last reporting date”.

Votes were cast as follows:

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

The decision was made.

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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 March 31, 2015, Magnit operated 28 distribution centers and over 10,000 stores (8,581 convenience, 300 hypermarkets, and 1,239 drogerie stores) in approximately 2,180 cities and towns throughout 7 federal regions of the Russian Federation.

In accordance with the audited IFRS consolidated financial statements for 2014, Magnit had revenues of RUB 764 billion and an EBITDA of RUB 86 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.