Remuneration and Nomination Committee report

The remit of the Remuneration Committee is to recommend the remuneration policy to the Board of Directors, to prepare proposals for the Board for the remuneration of individual members of the management and to advise management on the level and structure of compensation for other senior personnel, to ensure the succession planning process in the organization.

The role of the Remuneration Committee is described in its charter which is available on the Company’s website under http://invest.mvideo.ru/eng/management/directors/index.shtml.

On 31 December 2011 the Remuneration Committee consisted of Mr. Utho Creusen (Chairman), Mr. David Hamid and Mr. Peter Györffy.

The Committee had seven meetings in 2011.

We have endeavored to retain incentive and reward for a team that continues to outperform the market. To this end a new LTIP program was under consideration of the Committee observing different alternatives to offer top team managers an attractive compensation package which is focused on rewarding the creation of long term shareholder value. The new LTIP (2010 – 2015) which has been presented and approved by the Board in December 2009 has positively affected to team motivation.

Overall I am pleased to report that the matter of remuneration policy is taken seriously by the board and that the committee, consisting entirely of independent directors, is functioning properly to look after the interests of all shareholders, using external benchmarks to set appropriate levels of remuneration.

Utho Creusen,
Remuneration and Nomination Committee Chairman.