Press-release
Krasnodar
October 8, 2014
OJSC "Magnit" Announces the Results of the BOD Meeting
Krasnodar, October 8, 2014: OJSC "Magnit", Russia's largest food retailer (the
"Company", "Issuer"; MICEX and LSE: MGNT), is pleased to announce the results
of the BOD meeting held on October 7, 2014.
Please be informed that on October 7, 2014 the BOD meeting was held (minutes of
the BOD meeting of OJSC "Magnit" are w/o No. of October 8, 2014).
The meeting agenda:
1. Determination of OJSC "Magnit" business priorities.
2. Approval of the related party transaction.
3. Determination of the amount of remuneration for the auditor's services.
4. 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.
5. 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.
The following BOD members were present: A. Arutyunyan, K. Pombukhchan.
S. Galitskiy, A. Shkhachemukov, A. Zayonts, A. Makhnev and A. Pshenichniy and
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. Shkhachemukov, A. Zayonts, A. Makhnev and A.
Pshenichniy and 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 decisionsand 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 fourth quarter
of 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.
Item 2 on the agenda:
"To approve the loan agreement (several associated loan agreements) which the
Company plans to execute in future with LLC "Selta" (Taxpayer Identification
Number 2310053662, location: 15/5 Solnechnaya street, Krasnodar, Krasnodar
krai, Russia) and which is the related party transaction with the following
essentials:
* parties of the transaction (transactions): the lender - OJSC "Magnit", the
borrower - LLC "Selta";
* subject of the transaction (transactions): loan of funds;
* maximum price (amount) of the transaction (transactions): 885,000,000
(Eight hundred and eighty five million) rubles;
* loan interest rate: not more than 11.45% (Eleven point four five percent)
per annum;
* time limit for the fulfillment of obligations under the transaction
(transactions): up to 3 (Three) years from the time of its conclusion (the
time of repayment of the loan amount and interest).
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 - "did not participate in voting", S. Galitskiy - "did not
participate in voting", 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 determine remuneration for the services of the auditor in accordance with
IFRS - Ernst & Young LLC for the audit of the consolidated financial statements
(including the consolidated financial statements, prepared in accordance with
the Federal law as of 27.07.2010 N 208-FZ "On consolidated financial
statements") for 2014 in the amount equivalent to 1,742,902 (One million seven
hundred and forty two thousand nine hundred and two) US dollars (including VAT)
at the exchange rate of the Central bank of the Russian Federation as of the
date of payment."
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 4 on the agenda:
"To recommend the sole executive body of OJSC "Magnit", which is the
shareholder of JSC "Tander", to make the following decision at the exercise of
the voting right on shares of JSC "Tander" owned by the Company:
"According to the clause 14.2 of the Charter of JSC "Tander" to approve several
associated transactions, which the Company executed and (or) 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:
* parties of the transaction (transactions): the lender - OJSC "Magnit", the
borrower - JSC "Tander" ;
* subject of the transaction (transactions): loan of funds;
* maximum price (amount) of the transaction (transactions): up to
35,000,000,000 (Thirty five billion) rubles;
* loan interest rate: not more than 12% (Twelve percent) per annum;
* time limit for the fulfillment of obligations under the transaction
(transactions): up to 3 (Three) years from the time of its conclusion (the
time of repayment of the loan amount and interest)."
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 5.1 on the agenda:
"To approve the future execution of the major transaction - bank guarantee
agreement (hereinafter - the Agreement) between LLC "Retail Import" and
Joint-stock commercial bank "Bank of Moscow" (open joint-stock company)
(hereinafter - OJSC "Bank of Moscow") with the following essentials:
1. The Agreement shall reflect intentions of OJSC "Bank of Moscow" (hereinafter
- the Guarantor) and LLC "Retail Import" (hereinafter - the Principal) to
execute agreements on provision of irrevocable unconditional bank guarantees by
the Guarantor within the period of the Guarantees issue for the benefit of
customs authorities of the Russian Federation (hereinafter - Beneficiary) for
the purposes of securing the Principal's proper fulfillment of obligation on
the use of excise stamps in accordance with their designated purpose, and
regulate the approval procedure of terms, execution and fulfillment of these
agreements, as well as the procedure of the Guarantees issue.
2. The maximum amount of the concurrent Guarantees issued under the Agreement
shall not exceed 700,000,000 (Seven hundred million) Russian rubles.
3. The period of Guarantees issue shall not exceed 12 (Twelve) months from the
date of execution of the Agreement.
4. The validity period of each Guarantee shall be determined by the Principal
in the corresponding application but shall not exceed 12 (Twelve) months from
the date of the Guarantee issue.
5. The Principal shall pay the following fees to the Guarantor:
* fee for the issue of each Guarantee under the Agreement, consisting of the
fixed part amounting to not more than 20,000 (Twenty thousand) rubles and
the unfixed part amounting to not more than 1.65% (One point six five) per
annum of the amount of the corresponding Guarantee for the period from the
date of the Guarantee issue to the date of expiry of the validity period of
the corresponding Guarantee, or to the latest calendar date of the quarter
in which the Guarantee actually ceased to be effective;
* other fees, commissions and payments, related to the fulfillment of the
Agreement by the Guarantor, in accordance with the effective rates of the
Guarantor.
6. For the non-fulfillment and/or improper fulfillment of obligations by the
Principal under the Agreement, the Guarantor shall be entitled:
* to charge the Principal the fee in the form of penalty in the amount not to
exceed 1.0% of the Guarantees amount outstanding on the date of the
corresponding breach, per each breach, in case of the Principal's
non-observance of the terms related to securing of the positive value of
sector III of the Principal's balance sheet as of the latest reporting date
within the Guarantees validity period, with informing the Guarantor by way
of the further notification of the Guarantor of credits and loans
obtaining, own promissory notes issue, pledge of the Principal's property
as collateral, guarantees provision, obtaining of new bank guarantees,
loans provision, acquisition of promissory notes of the third parties, if
the amount of the transaction exceeds 5% of the balance sheet assets value
of the Principal as of the latest reporting date provided that the share of
the Guarantor in the total credit portfolio of the Principal (received
credits, loans, issued promissory notes) amounts to or exceeds 40%;
* in case of non-observance by the Principal of the written claim of the
Guarantor for provision the Guarantor with the right for debiting the
Principal's accounts in banks other than OJSC "Bank of Moscow" without an
additional order, to charge the Principal the fee in the form of penalty in
the amount not to exceed 0.01% of the Guarantees amount outstanding on the
date of forwarding the claim for provision the Guarantor with the right for
debiting the account without an additional order;
* if the Principal does not provide the quarterly receipt of funds into the
Principal's account, opened by the Guarantor, within the Guarantee validity
period in the amount not less than 50% of the maximum amount of the
Guarantees issued under the Agreement for the accounting period, to charge
the Principal the fee in the form of penalty in the amount not to exceed
0.5% of the difference between the determined amount of funds received into
the account and the actual amount of funds received into the account for
the accounting period (per each breach);
* for non-fulfillment and/or improper fulfillment by the Principal of the
obligation on payment of the fee to the Guarantor for the Guarantee
provision and/or the reimbursement to the Guarantor of amounts, paid by the
Guarantor at the request of the Beneficiary in accordance with the latest
claim, as well as on the payment/reimbursement of other amounts due to the
Guarantor in accordance with the terms of the Agreement, within the
established time limit, to charge the Principal the fee in the form of
penalty in the amount not to exceed 0.08 % of the amount of overdue
indebtedness per each overdue day, for the period from the date of
incurrence of the overdue indebtedness to the date of redemption of this
indebtedness in full (inclusive);
* if the Guarantor's claim to grant the additional security (filed by the
Guarantor in case of the Principal's non-observance of the terms related to
securing of the positive value of sector III of the Principal's balance
sheet as of the latest reporting date within the Guarantees validity
period, with informing the Guarantor by way of the further notification of
credits and loans obtaining, own promissory notes issue, pledge of the
Principal's property as collateral, guarantees provision, obtaining of new
bank guarantees, loans provision, acquisition of promissory notes of the
third parties, if the amount of the transaction exceeds 5% of the balance
sheet assets value of the Principal as of the latest reporting date
provided that the share of the Guarantor in the total credit portfolio of
the Principal (received credits, loans, issued promissory notes) amounts to
or exceeds 40%), meeting the claims of the Guarantor, is not fulfilled by
the Principal within the established time limit, to charge the Principal
the fee in the form of penalty in the amount not to exceed 1.0% per annum
of the Guarantee amount outstanding on the date of non-fulfillment/improper
fulfillment by the Principal of the Guarantor's claim to provide the
additional security for each day from the date following the date,
established for the granting of the additional security to the effective
date of the granting of the additional security (per each breach);
* if the Guarantor's claim to grant the additional security, (filed in case
of the Principal's failure to meet the claim of the Guarantor to entitle
the latter to debit the Principal's accounts in the banks other than OJSC
"Bank of Moscow" without an additional order) is not fulfilled by the
Principal within the established time limit, to charge the Principal the
fee in the form of penalty in the amount not to exceed 1.0% per annum of
the guarantee amount outstanding on the date of non-fulfillment/improper
fulfillment by the Principal of the Guarantor's claim to provide the
additional security for each day from the date following the date,
established for the granting of the additional security to the effective
date of the granting of the additional security (per each breach);
* for non-fulfillment/improper fulfillment by the Principal of the
obligations, related to the delivery of the documents and information to
the Guarantor, to charge the Principal the fee in the form of penalty in
the amount not to exceed 10,000 rubles per each day from the date following
the date of the deadline to fulfill obligations to the effective date of
the proper performance of obligations (per each breach, if the obligation
is to deliver documents - per each undelivered document);
* for non-fulfillment/improper fulfillment by the Principal of the
obligations, related to the granting of the new valid licenses,
permissions, certificates, related to the operations of the Principal, to
charge the Principal the fee in the form of penalty in the amount not to
exceed 0.01% of the Guarantees amount outstanding on the date of
non-fulfillment/improper fulfillment of the obligations hereof, per each
day from the date following the date of maturity of the obligation to the
effective date of the proper performance of the obligation.
7. The Agreement shall become effective from the date on which it is signed and
shall remain in force until the Parties fully fulfill all their obligations
under the Agreement."
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 5.2 on the agenda:
"To recommend the sole executive body of OJSC "Magnit", which is the
shareholder of LLC "Retail Import", to make the following decision at the
exercise of the voting right on shares in the charter capital of LLC "Retail
Import" owned by the Company:
"To approve the Agreement on fulfillment of obligations (hereinafter - the
Agreement) which LLC "Retail Import" (hereinafter - the Party-1) plans to
execute in the future with Open joint-stock company "Rosspirtprom" (Taxpayer
Id. Number 7730605160; Location: bld. 21, 34 Kutuzovsky prospect, Moscow,
121170 (hereinafter - the Party-2) and which is a major transaction on the
following terms:
1. The Party-2 and the Central Excise Customs (hereinafter - the Creditor)
intend to conclude the following two Guarantee agreements with customs
authorities of the Russian Federation (hereinafter - the Creditor) upon
fulfillment by the Party-1 of the Agreement terms:
2.
1. The Guarantee Agreement 1 for a period of 2 (two) years according to
which the Party-2 shall be liable to the Creditor for fulfillment of
obligations of the Party-1 on the use of the acquirable excise stamps
for the purpose intended which includes:
* execution of the Rules on marking of alcoholic products with excise stamps
approved by the Resolution of the Government of the Russian Federation as
of December 31, 2005 №866 "On marking of alcoholic products with excise
stamps";
* fulfillment of obligations of the Party-1 on the provision of the report on
the use of the previously issued stamps within the specified period. The
amount of guarantees under the Guarantee agreement 1 shall not exceed
1,000,000,000 (One billion) rubles.
*
1. The Guarantee Agreement 2 for a period of 2 (two) years in accordance
to which the Party-2 shall be liable to the Creditor for fulfillment of
obligations of the Party-1 to the Creditor which may occur in the
future on customs clearance charge, payment of taxes and fees in
accordance with article 79, article 80 clause 1, article 91 clause 4,
article 227 of the Customs Code of the Customs Union, article 151,
article 154 clause 1 of the Federal law as of November 27, 2010 №311-FZ
"On customs regulation in the Russian Federation" in the amount not
exceeding 1,000,000,000 (One billion) rubles.
* In case if the Party-2 fulfills the obligations of the Party-1 under the
Guarantee agreement 1 and/ or the Guarantee agreement 2, the Party-2 shall
obtain the Creditor's rights under this obligation to the extent to which
the Party-2 as the Guarantor of the Party-1 will meet the requirements of
the Creditor.
* The Party-1 shall accrue and pay remuneration to the Party-2 for provision
of the guarantee services to the Creditor for the Party-1 in the following
form and amount:
*
1. Non-recurring remuneration for provision of services within the first
90 calendar days after the Guarantee agreement 1 has been signed by the
Creditor and the Party-2, regardless of the use of the Total limit
(maximum amount of the possible guarantees under obligations, specified
in the Guarantee agreement 1 and determined in the amount of not more
than 1,000,000,000 (One billion) rubles), in the amount of not more
than 4.5% per annum (and VAT) of the Total limit.
2. Monthly remuneration at the rate of:
+ not more than 4.5% per annum (and VAT) of the amount of guarantees on
obligations used by the Party-1 in a certain period of the Guarantee
agreement 1 duration (hereinafter - the Actual limit amount) for each
day of use of the Actual limit amount in the accounting period (month)
excluding the first 90 calendar days after the Guarantee agreement 1
has been signed by the Creditor and the Party-2;
+ not more than 4.5% per annum (and VAT) for the previous month of the
Total limit 2 (maximum amount of the possible guarantees under
obligations, specified in the Guarantee agreement 2 and determined in
the amount of not more than 1,000,000,000 (One billion) rubles).
4. Under the Agreement the Party-1 and the insurance company shall
conclude an agreement of the excise stamps insurance as cargo against
loss, shortage or damage as well as other risks indicated in the
insurance company's rules on cargo insurance. The amount of insurance
under the insurance agreements at the time of their conclusion shall
not be less than the Actual limit amount.
5. Maximum liability of the Party-1 to the Party-2 under the Agreement in
case of non-fulfillment and/or improper fulfillment by the Party-1 of
its obligations under the Agreement shall not exceed in total 0.5%
(zero point five percent) of the total debt of the Party-1 under the
Agreement.
6. The term of validity of the Agreement: not more than 5 (Five) years.
The term of validity of the Agreement shall be automatically extended
for the following calendar year if otherwise stated by neither parties
in the written notice 30 (Thirty) days prior the expiry date of the
Agreement".
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: post@magnit.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@magnit.ru
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 is
headquartered in the southern Russian city of Krasnodar. As of June 30,
2014, Magnit operated 24 distribution centers and over 8,600 stores (7,614
convenience, 226 hypermarkets, and 778 drogeries) in approximately 2,000
cities and towns throughout 7 federal regions of the Russian Federation.
In accordance with the reviewed IFRS consolidated financial statements for
1H 2014, Magnit had revenues of $9,979 million USD and an EBITDA of $1,045
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 one of the largest retailers in Europe.