Report on compliance with the principles and recommendations of the Corporate Governance Code

1. The company provides accessible means of communication with the company, such as a “hotline”, e-mail, or online forum, to enable shareholders to express their opinion and send questions on the agenda in preparation for the general meeting.

The above means of communication were organised by the company and made available to shareholders in the course of preparation for each general meeting held in the reporting period.

1. In the reporting period the notice of an upcoming general meeting of shareholders is posted (published) on the company’s website on the Internet no later than 30 days prior to the date of the general meeting, unless a longer period is required by law.

2. The notice of an upcoming meeting indicates the documents required for admission.

3. Shareholders were given access to the information on who proposed the agenda items and who proposed nominees to the company’s board of directors and the revision committee (if its establishment is stipulated by the company’s Articles of Association).

1. In the reporting period shareholders were given an opportunity to put questions to members of executive bodies and members of the board of directors in the course of preparation for, and during, the general meeting.

2. The position of the board of directors (including dissenting opinions (if available) entered in the minutes) on each item on the agenda of general meetings held in the reporting period was included in the materials for the general meeting.

3. The company gave duly authorised shareholders access to the list of persons entitled to participate in the general meeting, as from the date when such list was received by the company, for all general meetings held in the reporting period.

1. The company’s Articles of Association defines the deadline for shareholders to submit proposals to the agenda of the annual general meeting which shall be at least 60 days after the end of the respective calendar year.

2. In the reporting period the company did not reject any proposals for the agenda or nominees to the company’s governing bodies due to misprints or other insignificant flaws in the shareholder’s proposal.

The criterion for compliance with this paragraph of the Report has not yet been reflected in the Company’s corporate governance practice.

The possibility and necessity of introducing the relevant amendments to the Company’s Articles of Association is planned to be considered before the annual General Meeting of Shareholders for 2024.

However, the majority of the Company’s shareholders (over 97%) are clients of nominal holders and participate in the meeting by sending electronic documents to the registrar containing their expression of will on the agenda items of the General Meeting of Shareholders.

1. During general meetings of shareholders held in the reporting period in the form of a meeting (joint presence of shareholders), sufficient time was allocated for reports on, and discussion of, the agenda items. Shareholders had an opportunity to express their opinions and to ask questions on the agenda.

2. The company invited candidates to the company’s governing and control bodies and took all necessary measures to ensure their participation in the general meeting of shareholders at which their nominations were put to vote. The candidates to the company’s governing and control bodies who were present at the general meeting of shareholders were available to answer questions of shareholders.

3. The sole executive body, the person responsible for the accounting, the chairman or the other members of the board of directors’ audit committee were available to answer shareholders’ questions at the general meetings of shareholders held in the reporting period.

4. In the reporting period the company used telecommunication means to ensure the remote participation of shareholders at general meetings, or the board of directors made a reasonable decision on the fact there was no need (opportunity) to use such means in the reporting period.

Criteria 2 and 3 are only partially not complied with.

Criterion 4 is not complied with.

The Company’s internal documents set out the possibility for candidates to the management and supervision bodies of the Company, as well as for the sole executive body, a person responsible for the accounting, and other bodies of the Company to participate at the meeting in person.

However, in the reporting year, in line with Article 3 of Federal Law No. 25-FZ On Amending the Federal Law On Joint-Stock Companies and On Suspension of Certain Provisions of Legislative Acts of the Russian Federation dated 25 February 2022, the Company’s General Meetings of Shareholders were held in the form of absentee voting.

However, these persons are always available to answer questions — shareholders are able to address their questions regarding the Company’s operation through the Investor Relations department or the Corporate Governance department.

The Board of Directors did not consider the issue of providing shareholders with remote access to take part in general meetings during the reporting period because the majority of the Company’s shareholders (over 97%) are clients of nominal holders and participate in the meeting by sending electronic documents to the registrar containing their expression of will on the agenda items of the General Meeting of Shareholders.

The possibility and necessity of such a practice is planned to be considered before the annual General Meeting of Shareholders for 2024.

1. The company’s regulations on the dividend policy have been approved by the board of directors and disclosed on the company’s website on the Internet.

2. If the company’s dividend policy that prepares the consolidated financial statements uses reporting figures to determine the dividend amount, then relevant provisions of the dividend policy take into account the consolidated financial statements.

3. The explanation of the proposed net profit distribution, including payment of dividends and the company’s own needs, and the assessment of its compliance with the dividend policy adopted by the company, with clarifications and economic explanation of the requirement to direct a certain part of net profit to the company’s needs in the reporting period, were included in the materials for the general meeting of shareholders, the agenda of which contains an item on profit distribution (including the payment (declaration) of dividends).

1. The board of directors has the authority stipulated in the articles of association to appoint and remove members of executive bodies and to set out the terms and conditions of their contracts.

2. In the reporting period the nomination (appointments and HR) committee reviewed the compliance of the professional expertise, skills and experience of the members of the executive bodies with the company’s current and expected needs determined by the company’s approved strategy.

3. In the reporting period the board of directors reviewed the report(s) by the sole executive body or the collective executive body (if available) on the implementation of the company’s strategy.

1. The company’s principles of, and approaches to, setting up a risk management and internal control system were defined by the board of directors and specified in the company’s internal documents determining the risk management and internal control system policy.

2. In the reporting period the board of directors approved (revised) the appropriate amount of risks (risk appetite) of the company, or the audit committee and (or) risk management committee (if available) considered if it was reasonable to submit the issue of revising the company’s risk appetite for consideration by the board of directors.

Criterion 2 is not complied with.

In December 2021, the Board of Directors considered the report on evaluation of the efficiency of the internal control and risk management system of PJSC Magnit and its subsidiaries for 2021, the key results of the evaluation, and activities proposed to improve the internal control and risk management system of PJSC Magnit and its subsidiaries.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

Failure to comply with the above criterion is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

1. The company has developed, approved by the board of directors and put in place a remuneration and reimbursement (compensation) policy (policies) for its directors, members of executive bodies and other key executives.

2. At its meetings in the reporting period, the board of directors discussed matters related to such policy (policies).

1. The board of directors plays a key role in preventing, identifying, and resolving internal conflicts.

2. The company has set up mechanisms to identify transactions leading to a conflict of interest and to resolve such conflicts.

Criterion 1 is not complied with.
As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ on Joint-Stock Companies dated 26 December 1995.

Failure to comply with the above criterion is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

1. The company’s annual report for the reporting period includes the information on attendance of the board of directors and committee meetings by each member of the board of directors.

2. The annual report discloses key performance assessment (self-assessment) results of the board of directors in the reporting period.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

Failure to comply with the above principle is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

An independent director is a person who is sufficiently professional, experienced, and independent to develop their own position, and capable of making unbiased judgements in good faith, free of influence by the company’s executive bodies, individual groups of shareholders, or other stakeholders.

It should be noted that a nominee (elected director) who is related to the company, its substantial shareholder, substantial counterparty, or competitor of the company, or is related to the government, may not be considered as independent under normal circumstances.

1. In the reporting period the board of directors (or its nomination committee) made a judgement on the independence of each nominee to the board of directors and provided its opinion to shareholders.

2. In the reporting period the board of directors (or its nomination committee) reviewed, at least once, the issue on independence of incumbent directors (after their election).

3. The company has in place procedures defining the actions to be taken by directors if they cease to be independent, including the obligation to timely notify the board of directors thereof.

Criterion 2 is not complied with.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

Failure to comply with the above criterion is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

1. The board of directors is chaired by an independent director, or a senior independent director is appointed from among the independent directors.

2. The role, rights, and duties of the chairman of the board of directors (and, if applicable, of the senior independent director) are duly set out in the company’s internal documents.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

Failure to comply with the above principle is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

1. The company’s internal documents stipulate that a director should notify the board of directors of any existing conflict of interest as to any agenda item of a meeting of the board of directors or its committee, prior to discussing the relevant agenda item.

2. The company’s internal documents stipulate that a director should abstain from voting on any item in connection with which they have a conflict of interest.

3. The company has in place a procedure enabling the board of directors to get professional advice on matters within its remit at the expense of the company.

1. Individual attendance at board and committee meetings, as well as the sufficiency of time for work on the board of directors, including its committees, was analysed as part of the procedure of assessment (self-assessment) of the board of directors’ performance in the reporting period.

2. Under the company’s internal documents, directors notify the board of directors of their intentions to be elected to governing bodies of other entities (apart from the entities controlled by the company), and of their election to such bodies.

Criterion 1 is not complied with.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

Failure to comply with the above criterion is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

1. Under the company’s internal documents, directors are entitled to receive information and documents necessary for the board of directors’ members to perform their duties and related to the company and its controlled entities, while executive bodies of the company should ensure the provision of the relevant information and documents

2. The company carries out a formalised induction programme for newly elected members of the board of directors.

1. The company has an approved internal document that describes the procedure for arranging and holding meetings of the board of directors and stipulates, in particular, that the notice of the meeting is to be given, as a rule, at least five days prior to such meeting.

2. In the reporting period members of the board of directors who were not able to attend the meeting of the board of directors were provided with an opportunity to participate in the discussion of agenda items and voting remotely – by means of conference and video conference communication.

In the opinion of the Company, the development of modern telecommunications technologies practically eliminates the differences in the effectiveness of in person and absentee formats of meetings of the Board of Directors. The most important issues included in the agenda of meetings of the Board of Directors are preliminarily considered by the relevant committees of the Board of Directors and are comprehensively discussed by members of the Board of Directors before voting, including absentee form of voting.

The Company believes that transferring a large number of meetings of the Board of Directors to in person format is not economically feasible. Taking into account the epidemiological situation that developed over the past few years and the related limitations, in person meetings for the Company were not possible.

In the future, the Company plans to maintain this approach to holding meetings and to develop the use of modern telecommunication technologies when planning meetings and making decisions.

1. The board of directors set up an audit committee comprised solely of independent directors.

2. The company’s internal documents set out the tasks of the audit committee, including those listed in Recommendation 172 of the Code.

3. At least one member of the audit committee represented by an independent director has experience and knowledge of preparing, analysing, assessing, and auditing accounting (financial) statements.

4. In the reporting period meetings of the audit committee were held at least once during the reporting period.

Criterion 1 is only partially complied with.

Criterion 4 is not complied with.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

In the reporting period, the Audit Committee comprising solely independent directors retained the composition proposed by the Board of Directors elected by the General Meeting of Shareholders in 2021 until 30 June 2022 (inclusive).

Failure to comply with the above criteria is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

1. The board of directors set up a remuneration committee comprised solely of independent directors.

2. The remuneration committee is headed by an independent director who is not the chairman of the board of directors.

3. The company’s internal documents set out the tasks of the remuneration committee, including those listed in Recommendation 180 of the Code, and conditions (events), upon the occurrence of which the remuneration committee considers the revision of the company’s remuneration policy for members of the board of directors, executive bodies and other key executives.

Criteria 1 and 2 are only partially complied with.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

In the reporting period, the HR and Remuneration Committee comprising solely independent directors retained the composition proposed by the Board of Directors elected by the General Meeting of Shareholders in 2021 until 30 June 2022 (inclusive).

Failure to comply with the above criteria is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

Criterion 3 is only partially complied with.

The Company’s internal documents do not specify the specific conditions upon the occurrence of which the remuneration committee considers the issue of revising the Company’s remuneration policy for the members of the Board of Directors, executive bodies and other key executives.

The criterion for compliance with this paragraph of the Report has not yet been reflected in the Company’s corporate governance practice.

The possibility and necessity of introducing the relevant amendments to the Company’s internal documents is planned to be considered before the annual General Meeting of Shareholders for 2024.

However, the HR and Remuneration Committee considered remuneration issues on a regular basis.

1. The board of directors has set up a nomination committee (or its tasks listed in Recommendation 186 of the Code are fulfilled by another committee) predominantly comprised of independent directors.

2. The company’s internal documents set out the tasks of the nomination committee (or the tasks of the committee with combined functions), including those listed in Recommendation 186 of the Code.

3. For the purpose of forming the board of directors that meets the company’s goals and objectives most fully, in the reporting period the nomination committee, on its own or jointly with other board of directors’ committees or the company’s authorised shareholder relations unit, organised the engagement with shareholders, not limited to the largest shareholders, in the context of choosing nominees to the company’s board of directors.

Criterion 1 is only partially complied with.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

The Audit Committee comprising solely independent directors retained the composition proposed by the Board of Directors elected by the General Meeting of Shareholders in 2021 until 30 June 2022 (inclusive).

Failure to comply with the above criterion is temporary, as the Company expects the circumstances that gave rise to the noncompliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of

PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

Failure to comply with the above principle is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

1. The audit committee, remuneration committee, nomination committee (or the relevant committee with a combined function) were headed by independent directors in the reporting period.

2. The company’s internal documents (policies) include provisions stipulating that persons who are not members of the audit committee, the nomination committee (or the relevant committee with a combined function) or the remuneration committee may attend committee meetings only by invitation of the chairman of the respective committee.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

Failure to comply with the above principle is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

1. The procedures of conducting the assessment (self-assessment) of the board of directors’ performance are determined in the company’s internal documents.

2. Assessment (self-assessment) of the board of directors’ performance carried out in the reporting period included performance assessment of committees, individual assessment of directors, and the board of directors in general.

3. Results of assessment (self-assessment) of the board of directors’ performance carried out in the reporting period were reviewed at the meeting of the board of directors held in person.

The procedures of conducting the assessment (self-assessment) of the Board of Directors’ performance are not formalised in the internal documents.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

Failure to comply with the above criterion is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

1. The company has adopted and published an internal document – regulations on the corporate secretary.

2. The board of directors approves the nominee to the position of the corporate secretary, terminates his/her powers, and considers the corporate secretary’s additional remuneration.

3. The company’s internal documents stipulate the right of the corporate secretary to request, receive documents and information from the company’s governing bodies, structural units and officials.

The company pays fixed annual remuneration to its directors. The company does not pay remuneration for attending particular meetings of the board of directors or its committees.

The company does not apply any form of short-term motivation or additional financial incentive for its directors.

1. In the reporting period the company paid remuneration to the board of directors in accordance with the remuneration policy adopted by the company.

2. In the reporting period the company did not apply any forms of short-term motivation or additional financial motivation, the payment of which depends on the results (indicators) of the company’s performance, in relation to the board of directors’ members. Payments of remuneration for the participation in meetings of the board of directors or committees of the board of directors were not made.

1. In the reporting period annual performance results approved by the board of directors were used to determine the amount of the variable part of remuneration due to members of executive bodies and other key executives of the company.

2. During the latest assessment of the remuneration system for members of executive bodies and other key executives of the company, the board of directors (remuneration committee) made sure that the company applies an efficient ratio of the fixed and variable parts of remuneration.

3. When determining the amount of remuneration to be paid to the members of the executive bodies and other key executives of the company, the risks borne by the company are taken into account in order to avoid incentives to take excessively risky management decisions.

The Board of Directors approved the Long-Term Incentive Programme. The Programme is designed to motivate management to increase the market capitalisation of the Company supported by EBITDA growth. The Programme includes remuneration in the form of shares and options in annual tranches. Remuneration will depend on the share price. The Programme is designed for five years. There are no restrictions on the disposal of shares received under the Programme.

Instead of a restriction on the disposal of shares (and the dependence of the right of disposal on the achievement of indicators), it provides for a dependence of the granting of shares on the achievement of certain indicators and the deferred provision of shares in each of the annual tranches in parts over three years, and the loss of participants’ right to receive tranches (parts of tranches) in case of resignation from the Company.

The Company finds this approach to the provision of shares as part of the long-term incentive most reasonable and plans to follow it in the future.

1. The company has in place an approved anti-corruption policy.

2. The company established a safe, confidential and accessible method of notifying the board of directors or the board’s audit committee of breaches or any violations of the law, the company’s internal procedures and code of ethics.

1. In the reporting period the board of directors (the audit committee and (or) the risk management committee (if available) organised the assessment of the reliability and efficiency of the risk management and internal control system.

2. In the reporting period the board of directors reviewed the results of assessment of the reliability and efficiency of the company’s risk management and internal control system. Information on the results consideration is included in the company’s annual report.

Criterion 2 is not complied with.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, PJSC Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

Failure to comply with the above criterion is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

1. In the reporting period, the reliability and efficiency of the risk management and internal control system were assessed as part of the internal audit procedure.

2. In the reporting period, the corporate governance practice (certain practices) was (were) assessed as part of the internal audit procedure, including the procedures of the information interaction (including internal control and risk management issues) at all levels of the company’s management, as well as stakeholders engagement.

1. The company’s board of directors approved an information policy developed in accordance with the Code’s recommendations.

2. In the reporting period the board of directors (or one of its committees) considered the issue on the efficiency of information engagement of the company, shareholders, investors and other stakeholders, and considered if it was reasonable (necessary) to revise the company’s information policy.

Criterion 2 is not complied with.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, PJSC Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

Failure to comply with the above criterion is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

1. The company discloses information on its corporate governance system and general principles of corporate governance, including disclosure on its website.

2. The company discloses information on the membership of its executive bodies and board of directors, independence of directors and their membership in the board of directors’ committees (as defined by the Code).

3. If the company has a controlling person, the company publishes a memorandum of the controlling person setting out this person’s plans for the company’s corporate governance.

Criterion 2 is only partially complied with.

The Company discloses information in accordance with Resolution of the Government of the Russian Federation No. 351 dated 12 March 2022 On the Specifics of Disclosing and Providing in 2022 Information Subject to Disclosure and Provision under the Federal Laws On Joint-Stock Companies and On the Securities Market and On the Specifics of Disclosing Insider Information under the Federal Law On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation starting from 30 June 2022.

Failure to comply with the above criterion is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

1. The company has a procedure ensuring coordination of work of all structural units and employees of the company who are related to information disclosure or whose operation may result in the requirement to disclose information.

2. If the company’s securities are traded in foreign organised markets, the company makes disclosures of material information in the Russian Federation and in the said markets in the reporting year on a concurrent and equal basis.

3. If foreign shareholders hold a substantial number of shares in the company, the relevant information was disclosed in the reporting period both in the Russian language and in one of the most widely used foreign languages.

1. The company’s information policy outlines the approaches to the disclosure of information on other events (actions) that have a significant impact on the value or price of its securities in cases where the disclosure is not required by law.

2. The company discloses information on its shareholding structure in its annual report and on its website as required by Recommendation 290 of the Code.

3. The company discloses information on the controlled entities that are of significant importance to the company, including the key areas of operation, tools ensuring accountability of the controlled entities, the powers of the company’s board of directors to determine the strategy and assess the performance of the controlled organisation.

4. The company publishes a non-financial report – a sustainability report, an environmental report, a corporate social responsibility report or any other report containing non-financial information, including that on factors related to the environment (including environmental and climate change factors), society (social factors) and corporate governance, except for a report of the issuer of issue-grade securities and a report of the joint-stock company.

Criterion 2 is only partially complied with.

The Company has been required to disclose information, including in the form of the issuer’s reports (quarterly issuer’s reports), since 2006. As part of compliance with the disclosure legislation, the Company discloses the number of its shareholders, the number of voting shares broken down by share category (type) and the number of shares held by the Company and its controlled entities, the persons who directly or indirectly own shares and (or) can use the votes attaching to the shares that represent at least 5% of the authorised capital or ordinary shares in the Company and any other information required by applicable law, in the form of statements of material facts and as part of annual, quarterly reports (issuer’s reports) and lists of affiliates, which are disclosed on the website.

That said, the Company has no procedure for disclosing additional information about the Company’s shareholding structure as specified by Recommendation 290 of the Code, specifically a procedure requiring the Company’s executive bodies to make a statement that the Company is unaware of any shareholdings exceeding 5% other than those already disclosed by the Company. The Company plans to consider whether the relevant provisions can and need to be included in the Company’s internal documents and its corporate governance practice before the annual General Meeting of Shareholders for 2023.

Even though the Company does not disclose its unawareness in the form of a statement of its executive bodies, this does not result in any information on the Company’s shareholding structure being concealed in violation of Recommendation 290 of the Code. The Company avoids a formalistic approach to the disclosure of material information about its activities.

1. The company’s annual report contains the results of the assessment by the audit committee of the effectiveness of external and internal audit.

2. The company’s annual report outlines the company’s environmental protection and safety policies, as well as the social policy of the company.

Criterion 1 is not complied with.

As amid escalation of geopolitical tensions in the reporting year a number of countries introduced and tightened sanctions against Russia and businesses operating in Russia, PJSC Magnit, just like many other companies, faced uncertainty, in which getting many corporate procedures implemented as planned for 2022 turned out to be impossible.

The annual General Meeting of Shareholders of PJSC Magnit scheduled for 30 June 2022 was declared inquorate. As a result, all powers of the Board of Directors except for the powers to prepare for, convene and hold an annual General Meeting of Shareholders ended under Article 66 of Federal Law No. 208-FZ On Joint-Stock Companies dated 26 December 1995.

Failure to comply with the above criterion is temporary, as the Company expects the circumstances that gave rise to the non-compliance to have ceased before the annual General Meeting of Shareholders to be held for 2023.

1. The company’s information policy (internal documents determining the information policy) establishes (establish) the procedure for providing shareholders with unhindered access to information and documents of the company at the request of shareholders.

2. The company’s information policy (internal documents determining the information policy) contains (contain) provisions stipulating that if a shareholder requests information on the company’s controlled entities, the company shall make the necessary efforts to obtain such information from the relevant controlled entities of the company.

Criterion 2 is not complied with.

This recommendation of the Corporate Governance Code is not directly reflected in the Company’s information policy.

The Company adopted the Regulations on the Information Policy, which, inter alia, takes into account recommendations of the Corporate Governance Code.

As for the practical implementation, the Company provides information about its operations at the request of shareholders, makes the necessary efforts to obtain information from the relevant controlled entities, and, in addition to the information required to be disclosed by applicable law, the Company discloses on its own initiative a large amount of data on the controlled entities that are of significant importance to the Company. In practical terms, access to the information on the Company’s performance is not hindered.

The Company finds this approach most reasonable and plans to follow it in the future.

1. In the reporting period, the company did not refuse to provide shareholders with requested information, or such refusals were justified.

2. In cases specified by the information policy, shareholders are informed of the confidential nature of the information provided and undertake to keep it confidential.

When taking material corporate actions affecting the rights and legitimate interests of shareholders, the Company ensures equal treatment of all its shareholders; and where the statutory procedures protecting shareholder rights are insufficient, the Company takes additional measures to protect their rights and legitimate interests.

In doing so, the company is guided by the corporate governance principles set forth in the Code, as well as by formal statutory requirements.

1. Approval of the Company’s material transactions is reserved to Board of Directors in accordance with the company’s Articles of Association, with due regard to the specifics of the Company’s operations and in addition to regulatory requirements for transaction approvals.

2. All material corporate actions in the reporting period were duly approved before they were taken.

1. The company’s internal documents set out the rules and procedure for engaging an appraiser to estimate the value of assets to be sold or acquired in a major transaction or a related party transaction.

2. The company’s internal documents set out a procedure for engaging an appraiser to estimate the value of shares to be acquired and bought back.

3. If a member of the company’s board of directors, the sole executive body, a member of the collegial executive body, or a person who is a controlling person of the company or a person entitled to give the company binding instructions has no formal interest in the company’s transactions, but has a conflict of interest or other actual interest with regard to such transactions, such persons shall abstain from voting on the approval of such transactions as required by the company’s internal documents.

Criteria 1 and 2 are only partially not complied with.

The Company’s internal documents set out a procedure for engaging experts to obtain professional advice on matters considered at meetings of the Board of Directors without specifying the purpose of engaging such experts.

In accordance with the applicable legislation, there are cases when the engagement of an independent appraiser is mandatory. Moreover, in accordance with the applicable legislation, an appraiser can be engaged in any of the specified cases (estimation of the value of property to be sold or acquired in a major transaction or a related party transaction, or assessment of the cost of an acquisition and buy-back).

The possibility and necessity of aligning the Company’s internal documents with the Code’s recommendation is planned to be considered before the annual General Meeting of Shareholders for 2024.