MIRA INFORM REPORT

Report No. :	496240
Report Date :	13.03.2018

IDENTIFICATION DETAILS

Name :	AO TANDER
Registered Office :	Levanevskogo Street 185, Krasnodarskiy Kray, Krasnodar 350002
Country :	Russia
Financials (as on) :	31.12.2016
Date of Incorporation :	28.06.1996
Com. Reg. No.:	OGRN 1022301598549
Legal Form :	Joint Stock Company
Line of Business :	· Retail sale in non-specialised stores with food, beverages or tobacco predominating · Retail sale of fruit and vegetables in specialised stores · Retail sale of meat and meat products in specialised stores · Retail sale of bread, cakes, flour confectionery and sugar confectionery in specialised stores
No. of Employees :	124,197

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A

Credit Rating	Explanation	Rating Comments
A	Acceptable Risk	Business dealings permissible with moderate risk of default

Status :	Good
Payment Behaviour :	No Complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List

Country Name	Previous Rating (30.09.2017)	Current Rating (31.12.2017)
Russia	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

RUSSIA - ECONOMIC OVERVIEW

Russia has undergone significant changes since the collapse of the Soviet Union, moving from a centrally planned economy towards a more market-based system. Both economic growth and reform have stalled in recent years, however, and Russia remains a predominantly statist economy with a high concentration of wealth in officials' hands. Economic reforms in the 1990s privatized most industry, with notable exceptions in the energy, transportation, banking, and defense-related sectors. The protection of property rights is still weak, and the state continues to interfere in the free operation of the private sector.

Russia is one of the world's leading producers of oil and natural gas, and is also a top exporter of metals such as steel and primary aluminum. Russia is heavily dependent on the movement of world commodity prices as reliance on commodity exports makes it vulnerable to boom and bust cycles that follow the volatile swings in global prices. The economy, which had averaged 7% growth during the 1998-2008 period as oil prices rose rapidly, has seen diminishing growth rates since then due to the exhaustion of Russia’s commodity-based growth model.

A combination of falling oil prices, international sanctions, and structural limitations pushed Russia into a deep recession in 2015, with GDP falling by close by 2.8%. The downturn continued through 2016, with GDP contracting another 0.2%, but was reversed in 2017 as world demand picked up. Government support for import substitution has increased recently in an effort to diversify the economy away from extractive industries.

Source : CIA

SUMMARY
COMPANY NAME	AO TANDER
ADDRESS	Building	Street			Area			PO Box
	Magnit Building	Solnechnaya Street 15/5			Prikubanskiy Okrug District			350072 Krasnodar
TEL/FAX	Verified Phones: (+7 861) 277 4554 / (+7 861) 277 4562 Fax: (+7 861) 210 9810
EMAIL/WEBSITE	Email: info@magnit.ru / post@magnit.ru/ Website: www.magnit-info.ru
ACTIVITY	NACE 4711 - Retail sale in non-specialised stores with food, beverages or tobacco predominating; NACE 4721 - Retail sale of fruit and vegetables in specialised stores; NACE 4722 - Retail sale of meat and meat products in specialised stores; NACE 4724 - Retail sale of bread, cakes, flour confectionery and sugar confectionery in specialised stores;
PRINCIPAL	Khachatur Eduardovich Pombukhchan					Workforce
	Chairman					124,197
LEGAL INFO	Date Of Est.		Reg. No.	Legal Form			Status
	28/06/1996		OGRN 1022301598549	Joint Stock Company			Active
CAPITAL	CURRENCY			AMOUNT
	RUBLE (RUB)			100,000,000

IDENTIFICATION
CO. NAME	AO TANDER
ENQUIRED NAME	CJSC TANDER
TRADEMARK	MAGNIT / Magnit Semeyniy / Magnit Kosmetik
ALSO KNOWN NAME (S)	JSC TANDER
FORMER NAME	ZAO TANDER / CJSC Tander
BUILDING	Magnit Building
STREET	Solnechnaya Street 15/5
AREA	Prikubanskiy Okrug District
POSTAL ADDRESS	350072 Krasnodar
CITY	Krasnodar
COUNTRY	Russia
TELEPHONE	(+7 861) 277 4554 / (+7 861) 277 4562 / (+7 861) 210 9810 ext. 15101 (Investor Relations Department)
FAX	(+7 861) 210 9810
VERIFIED EMAIL	info@magnit.ru / post@magnit.ru / chistyak@magnit.ru / panfilkina_aa@magnit.ru
WEBSITE	www.magnit-info.ru
BUSINESS HOURS	DAYS	OFFICE HOURS	BREAK TIME
	Mon-Fri	09:00-18:00	13:00-14:00
REGISTERED ADDRESS	Levanevskogo Street 185, Krasnodarskiy Kray, Krasnodar 350002, Russia

SENIOR PERSONNEL
MANAGEMENT	NAME	POSITION
	Khachatur Eduardovich Pombukhchan	Chairman
	Board of Directors Aslan Yurievich Shkhachemukov Aleksey Aleksandrovich Pshenichniy Aleksandr Vitalievich Alesandrov Dmitriy Igorevich Chenikov Sergey Nikolaevich Galitskiy Vladimir Evgenievich Gordeichuk Management Khachatur Eduardovich Pombukhchan Denis Anatolievich Fedotov Andrey Nikolaevich Arutyunyan Marina Alekseevna Ivanova Ilya Karimovich Sattarov Timothy Post Dina Svischeva	Chairman of the Board Member of the Board Member of the Board Member of the Board Member of the Board Member of the Board Chairman Managing Director Director Director Director Head of Investor Relations Deputy IR Director
WORKFORCE	NO. OF EMPLOYEES	PERIOD
	124,197	01.2018
	280,000 (Group)	01.2018

FINANCIAL SUMMARY
REVENUE	31/12/2016	31/12/2015
	RUB 1,175,193,293,000	RUB 1,032,002,495,000
NET PROFIT / (LOSS)	31/12/2016	31/12/2015
	RUB 36,968,316,000	RUB 43,674,458,000
PROFIT BEFORE TAX	RUBLE 47,384,160,000 as of 31/12/2016
STOCK/INVENTORIES	RUBLE 139,983,372,000 as of 31/12/2016

LEGAL STATUS
INCORPORATION	28/06/1996
REGISTRATION NO.	C.R. NUMBER	ISSUED BY
	OGRN 1022301598549 (issued on: 12/08/2002)	Federal Tax Service
OTHER REGISTRATION NO.	INN 2310031475 (Tax Code) / KPP 231001001 / OKPO 41351125 (Statistics Code) / OKTMO 03701000001
AUTHORISED CAPITAL	AMOUNT	CURRENCY
	100,000,000	RUBLE
PAID-UP CAPITAL	AMOUNT	CURRENCY
	100,000,000	RUBLE
LEGAL FORM	Limited Liability Company
BUSINESS HISTORY	The Company was incorporated in Russia on 28 June 1996 as Closed Joint Stock Company under the name ZAO TANDER (CJSC Tander) with the following shareholders: OOO Kuban Parfum Trading (70.3%) and OOO Transaziya-Kuban (29.97%). Later on, subject was converted into Joint Stock Company with the present name and shareholding structure.
STATUS	Active
SHAREHOLDERS	NAME	PERCENTAGE
	PAO MAGNIT Solnechnaya Street 15/5 Krasnodar 350072 Russia Telephone: (+7 861) 210 9810 E-Mail: info@magnit.ru Est.: 12/11/2003 C.R. No.: OGRN 1032304945947 Tax Code: INN 2309085638 Shareholders: PAO Bank VTB – 29.1% * Sergey Galitsky * (through Lavreno Ltd) – 2.72% Vladimir Gordeichuk - 2.54% Free float - 65.2% Shares controlled by the Group’s Management - 0.44% Magnit is Russia's largest food retailer. It was founded in 1994 in Krasnodar by Sergey Galitsky. Since 2006, the company has developed a chain of "Magnit" hypermarkets in many Russian cities and towns. It overtook its rival X5 Retail as Russia's largest retailer in terms of sales in April 2013, although it is still under-represented in Moscow. As of July 2014, it is the world's fourth largest retailer by market capitalization. As of March 2016, the company had 12,434 stores in 2,385 locations. They include 9,715 convenience stores, 225 hypermarkets, 2,337 Magnit Cosmetics stores and 157 Magnit family stores. The company has been opening several dozen stores each month. * TEARFUL MAGNIT FOUNDER SELLS OUT TO BANKING GROUP VTB FOR $2.5 BILLION FEBRUARY 16, 2018 (Reuters) - Russia’s Sergey Galitskiy has stepped down as CEO at the Magnit (MGNT.MM) supermarket chain he founded and sold most of his stake to state lender VTB (VTBR.MM) for about 138 billion roubles ($2.5 billion), bringing Kremlin influence into the retail sector for the first time. Galitskiy, 50, who founded Magnit in 1994, told a news conference with VTB chief Andrey Kostin it had not been an easy decision to sell. “I founded this company, but time passes and nothing is for ever,” he said in a voice cracking with emotion. The sale follows a difficult year for Magnit, as its market value halved on concern over slowing growth that resulted in it being overtaken by rival X5 (PJPq.L) as Russia’s biggest retailer. VTB’s newly acquired 29.1 percent stake makes it Magnit’s leading shareholder, with Galitskiy retaining only 3 percent, the state-controlled bank said. Magnit said VTB paid 4,661 roubles per share, representing a discount of about 4 percent to Thursday’s closing price of 4,850 roubles. By 1434 GMT on Friday the shares were down 7.8 percent in Moscow at 4,472 roubles and had dropped 11 percent in London. Galitskiy have no specific reason for the sale but said: “The final push came from the fact that the company’s investors stopped seeing eye to eye with its shareholders over what the situation looks like going forward.” Magnit’s stores, which target lower-income consumers, have struggled to compete against aggressive discounting by X5 and last month the group reported a 42 percent drop in quarterly net profit and said it was unlikely to pay a dividend this year. At one point at the news conference Galitskiy was overcome with emotion and said he could not speak, prompting Kostin, a close ally of Russian President Vladimir Putin, to put a sympathetic hand on his shoulder. Galitskiy would be replaced as CEO by long-time Chief Financial Officer Khachatur Pombukhchan, effective Feb. 17, Magnit said.	100.00%

OPERATION
BANKERS	1. PAO SBERBANK Krasnoarmeyskaya Street 34 Krasnodar 350000 Russia Telephone: (+7 861) 275 0808 Fax : (+7 861) 219 0017 Acc. No. : 40702810930010120150 Corr. Acc. No.: 30101810100000000602 2. PAO VTB Bank Leninskaya Sloboda Street 26 Moscow Russia Telephone: +(7 800) 200 2326
AUDITORS	Ernst & Young 77 Sadovnicheskaya Embankment, bld. 1, Moscow, 115035 Russia Tel: +(7 495) 755 9700 E-mail: Moscow@ru.ey.com Ernst & Young is a member of the Audit Chamber of Russia Self-Regulated Non-Profit Partnership and is included in the reference copy of the register of auditors and audit organizations under identification number 10201017420.
ACTIVITY CODE (NACE)	4711 - Retail sale in non-specialised stores with food, beverages or tobacco predominating; 4721 - Retail sale of fruit and vegetables in specialised stores; 4722 - Retail sale of meat and meat products in specialised stores; 4724 - Retail sale of bread, cakes, flour confectionery and sugar confectionery in specialised stores;
LINE OF BUSINESS	Subject owns and operates convenience stores and hypermarkets. It distributes, retails, and supplies perfumery, cosmetics, and household chemical goods. As of December 31, 2017, Magnit operated 16,350 Retail Stores (12,125 Convenience, 243 Hypermarkets, 208 Magnit Family stores, and 3,774 Drogerie stores) in 2,709 cities, towns, and villages throughout 7 of the federal regions in the Russian Federation. The Magnit retail-store network is supported logistically by 37 Distribution Centers.
IMPORT FROM	Worldwide, mainly from Turkey, Ecuador, Poland, Egypt, Israel, China, the Netherlands, Costa Rica, Serbia, Germany, France, UK, Switzerland, Austria, India, Morocco, Moldova, Ukraine and Belarus.
EXPORT TO	Subject does not engage in exporting activities.
FACILITIES	Premises comprising head offices located at the heading address as well as 12,125 Convenience, 243 Hypermarkets, 208 Magnit Family stores, and 3,774 Drogerie stores) located in 2,709 cities, towns, and villages throughout 7 of the federal regions in the Russian Federation.
VEHICLES	Subject has 6,089 Trucks for distribution purposes.
RELATED COMPANIES	Subsidiaries of PAO MAGNIT, subject’s parent company: 1. Retail Import LLC Russia Import operations 2. BestTorg LLC Russia Food retail in Moscow and the Moscow region 3. MFK LLC Russia 4. Selta LLC Russia Transportation services for the Group 5. TK Zelenaya Liniya LLC Russia Greenhouse complex 6. Tandem LLC Russia Rent operations 7. Alkotrading LLC Russia 8. ITM LLC Russia IT operations 9. Logistika Alternativa LLC Russia Import operations 10.Zvezda LLC Russia Assets holder, maintenance services for the Group 11.TD-Holding LLC Russia Production and processing of food for the Group 12.MagnitEnergo LLC Russia Buyer of electric power for the Group 13.Management Company Industrial Park Krasnodar LLC Russia Management of production assets 14.Kuban Confectioner LLC Russia Production of food for the Group 15.Kuban Factory of Bakery Products LLC Russia Production of food for the Group 16.Volshebnaya Svezhest LLC Russia Production of household chemicals for the Group 17.Moroznye Pripasy LLC Russia Production of food for the Group

FINANCIAL INFORMATION
CURRENCY	RUBLE
PERIOD	31/12/2016	31/12/2015
CURRENT ASSETS	186,082,431,000	162,867,218,000
STOCK/INVENTORIES	139,983,372,000	122,185,932,000
NON-CURRENT ASSETS	227,702,974,000	214,737,833,000
CURRENT LIABILITIES	149,844,401,000	177,728,150,000
NON-CURRENT LIABILITIES	181,853,269,000	130,757,482,000
EQUITY	82,087,735,000	69,119,419,000
BALANCE TOTAL	413,785,405,000	377,605,051,000
REVENUE	1,175,193,293,000	1,032,002,495,000
NET PROFIT / LOSS	36,968,316,000	43,674,458,000
NOTES	Balance sheets as at 31 December 2016 showed : 31/12/2016 31/12/2015 (in thousands of RUBLE) ASSETS Non-current assets Intangible assets 15,708 8,636 Fixed assets 203,057,806 186,694,167 Financial investments 2,842,289 2,764,260 Deferred tax assets 805 891 Other non-current assets 21,786,366 25,269,879 Total non-current assets 227,702,974 214,737,833 Current assets Stock 139,983,372 122,185,932 Value added tax on purchased valuables 431,761 348,164 Trade receivables 28,203,114 30,803,275 Financial investments 765,785 1,038,372 Cash equivalents 16,459,718 8,311,389 Other current assets 238,681 180,086 Total current assets 186,082,431 162,867,218 TOTAL ASSETS 413,785,405 377,605,051 EQUITY & LIABILITIES Share capital 100,000 100,000 Added capital 9 9 Reserve capital 15 15 Retained earnings 81,972,726 69,004,410 Total Equity 82,087,735 69,119,419 Long-term liabilities Borrowings 176,376,641 125,789,886 Deferred tax liabilities 5,476,628 4,967,596 Total long-term liabilities 181,853,269 130,757,482 Short-term liabilities Borrowings 20,994,938 45,345,616 Accounts payable 124,110,397 127,843,894 Total Short-term Liabilities 149,844,401 177,728,150 TOTAL EQUITY & LIABILITIES 413,785,405 377,605,051 INCOME STATEMENT Revenue 1,175,193,293 1,032,002,495 Cost of Sales 917,787,784 792,784,244 Gross Profit 257,405,509 239,218,251 Commercial expenses 264,155,806 230,744,885 Profit(loss) from sales -6,750,297 8,473,366 Other income and expenses Interest income 140,157 289,163 Interest payable 20,813,508 18,274,938 Income from participation in other organizations 293,804 12,373 Other income 113,061,246 103,757,139 Other expenses 38,547,242 39,440,848 Profit(loss) before taxation 47,384,160 54,816,255 Change in deferred tax assets 85 293 Change in deferred tax liabilities 509,033 -622,479 Current income tax 9,906,726 10,519,611 Net Profit(loss) 36,968,316 43,674,458 * Full 2017 balance sheets are not yet available. The following consolidated balance sheets as at 31/12/2016 applies to subject’s parent company, PAO MAGNIT: 31/12/2016 31/12/2015 (in thousands of US DLRS) ASSETS Non-current assets Property, plant and equipment 4,780,088 3,649,644 Investment property 9,892 8,232 Land lease rights 43,514 39,540 Intangible assets 23,470 19,162 Goodwill 22,545 18,763 Long-term financial assets 824 1,852 4,880,333 3,737,193 Current assets Inventories 2,224,242 1,598,069 Trade and other receivables 13,916 13,634 Advances paid 85,864 72,661 Taxes receivable 7,383 1,326 Prepaid expenses 7,565 4,403 Short-term financial assets 3,559 3,386 Income tax receivable 3,952 - Cash and cash equivalents 272,999 115,129 2,619,480 1,808,608 TOTAL ASSETS 7,499,813 5,545,801 EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Share capital 34 34 Share premium 1,511,666 1,510,336 Treasury shares - (5,307) Foreign currency translation reserve (2,413,987) (2,933,216) Retained earnings 4,134,845 3,693,994 Total equity 3,232,558 2,265,841 Non-current liabilities Long-term borrowings and loans 1,277,677 815,162 Long-term advances received 436 1,568 Deferred tax liability 257,172 176,781 1,535,285 993,511 Current liabilities Trade and other payables 1,383,573 1,212,527 Accrued expenses 175,549 132,738 Taxes payable 145,259 81,318 Dividends payable 196,793 233,167 Income tax payable - 9,203 Short-term advances Received 4,742 2,575 Short-term borrowings and loans 826,054 614,921 Total liabilities 4,267,255 3,279,960 TOTAL EQUITY AND LIABILITIES 7,499,813 5,545,801 CONSOLIDATED STATEMENT OF INCOME Revenue 16,033,612 15,594,588 Cost of sales (11,621,596) (11,151,836) Gross profit 4,412,016 4,442,752 Selling expenses (193,921) (207,612) General and administrative expenses (3,059,278) (2,883,839) Investment income 1,585 3,702 Finance costs (198,310) (194,986) Other income 60,208 64,967 Other expenses (13,260) (13,838) Foreign exchange gain/(loss) 16,992 (43,194) Profit before income tax 1,026,032 1,167,952 Income tax expense (214,380) (199,067) Profit for the year 811,652 968,885

SPECIAL REMARKS
INTERVIEWED	Dina Svischeva (Deputy IR Director).
COMMENTS	You enquired on: CJSC TANDER. Please note that this name applies to subject’s former name. Subject’s current registered name is as per heading. The address which you provided: 185, LEVANSKOGO STR, 350002, KRASNODAR applies to subject’s registered address. Please note that subject’s administrative office address is as per heading.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	INR 65.02
UK Pound	1	INR 90.12
Euro	1	INR 80.09
RUB	1	INR 1.14

Note : Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Analysis Done by :	VAR
Report Prepared by :	SYL

RATING EXPLANATIONS

Credit Rating	Explanation	Rating Comments
A++	Minimum Risk	Business dealings permissible with minimum risk of default
A+	Low Risk	Business dealings permissible with low risk of default
A	Acceptable Risk	Business dealings permissible with moderate risk of default
B	Medium Risk	Business dealings permissible on a regular monitoring basis
C	Medium High Risk	Business dealings permissible preferably on secured basis
D	High Risk	Business dealing not recommended or on secured terms only
NB	New Business	No recommendation can be done due to business in infancy stage
NT	No Trace	No recommendation can be done as the business is not traceable

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors are as follows:

· Financial condition covering various ratios

· Company background and operations size

· Promoters / Management background

· Payment record

· Litigation against the subject

· Industry scenario / competitor analysis

· Supplier / Customer / Banker review (wherever available)

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