SILVANO FASHION GROUP AS About the media coverage concerning SP ZAO Milavitsa, Belarus

On September 18 and 19, the Belarus media published articles that speculate about the probability of nationalization of Milavitsa factory, currently controlled by Silvano Fashion Group (83.19% of the share capital as of 23.09.14). The coverage indicates that the Republic of Belarus has expressed their interest in becoming a shareholder of the abovementioned factory.

Referring to the above, Silvano Fashion Group states the following:

1. As of 23.09.14, Silvano Fashion Group controls 83.19% of the voting shares of SP ZAO Milavitsa. Additionally to Silvano, Milavitsa has 491 private resident individual shareholders and 1 foreign institutional shareholder, who in total hold 16.81% of the shares.

2. Milavitsa has been registered in the list of strategic companies of the Republic of Belarus. This means that the local municipalities have the pre-emptive right of purchasing the shares of such companies, given that these shares have been issued under the privileged terms during the privatization of the company. In Milavitsa, the total amount of such privileged shares represents 6.3% of the total share capital. Silvano Fashion Group does not own any such shares.

3. The coverage in the Belarus media indicates that the Minsk City Executive Committee has expressed their interest to acquire such privileged shares from current shareholders. Silvano Fashion Group has not been addressed upon this matter.

4. According to the by-laws of Milavitsa, the highest body in the corporate governance is the shareholders meeting, the decisions at the meeting are adopted by the consent of the majority of the votes, in some cases ¾ of the votes are required. Supervisory Board consisting of 4 members is responsible for the strategic management of the company. The CEO of Milavitsa is responsible for the daily operations of the company.

In conclusion of the above, taking into account the Investment Protection Act between the republics of Estonia and Belarus, as well as the international legal practice, Silvano Fashion Group management announces that based on the currently available information, the decision making processes within the company have remained unchanged.

Märt Meerits

Chairman of the board

Silvano Fashion Group

+372 6845 000

info@silvanofashion.com

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