Share Repurchase: Information Letter on Tax Issues

LETTER OF INFORMATION

for shareholders of Detsky Mir PJSC re: taxation issues

in view of repurchase of own shares by Detsky Mir PJSC

November 2022

This Letter of Information contains a description of certain issues related to the procedure for taxation of income of legal entities and individuals, being shareholders of Detsky Mir PJSC, who voted "against" the decision on reorganization at the Extraordinary General Meeting of Shareholders of Detsky Mir PJSC or did not take part in the voting on this issue (in the event a decision is made to reorganize Detsky Mir PJSC in the form of a spin-off of DM LLC) from the sale of Shares based on the Call for Repurchase. The description is given from the point of view of Detsky Mir PJSC acting as a tax agent when paying the purchase price from the sale of Shares.

Shareholders, being individuals, shall study the provisions of Section 1 of this Letter of Information. The taxation regulations will depend, among other things, on whether the Shareholder is a tax resident (subsection 1 of Section 1) or a tax non-resident of the Russian Federation (subsection 2 of Section 1).

Shareholders, being organizations (legal entities), are recommended to study the provisions of Section 2 of this Letter of Information.

WE HIGHLY RECOMMEND THAT THE SHAREHOLDERS CONSULT WITH THEIR TAX CONSULTANTS AND, IF NECESSARY, GET CLARIFICATIONS ON ISSUES SET FORTH IN THIS LETTER OF INFORMATION, INCLUDING, IF APPLICABLE, ISSUES OF DETERMINING THE SHAREHOLDER'S СOUNTRY OF TAX DOMICILE AND TAXATION OF INCOME FROM SALE OF SHARES AS PART OF THE CALL FOR REPURCHASE.

THE INFORMATION IN THIS LETTER OF INFORMATION IS GIVEN FOR REFERENCE ONLY AND NOT FOR THE PURPOSE OF PROVIDING A CONSULTATION ON TAX ISSUES AND IS SENT TO SHAREHOLDERS IN CONNECTION WITH THE DETSKY MIR PJSC NEED TO CARRY OUT THE FUNCTIONS OF A TAX AGENT WHEN PAYING A PURCHASE PRICE FOR SHARES THAT WILL BE PURCHASED ON THE BASIS OF THE SHAREHOLDER'S CALL FOR REPURCHASE.

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TERMS
Term		Definition
Shares		Ordinary shares of Detsky Mir PJSC, state registration number of the
		issue 1-02-00844-A dd February 11, 2014, ISIN RU000A0JSQ90
Shareholder	Holder of shares who has the right to demand the repurchase of all or
		part of its Shares in accordance with Articles 75 and 76 of the Federal
		Law "On Joint-Stock Companies" (both registered and not registered in
		the register of shareholders of Detsky Mir PJSC (client of the nominee))
Questionnaire	Questionnaire of a Shareholder (Annex No. 1 to this Letter of Information)
IRC - R.O.S.T. JSC	Independent Registrar Company R.O.S.T. Joint-Stock Company,
		which is the registrar of Detsky Mir PJSC and engaged by Detsky Mir
		PJSC to provide services in connection with the right of Shareholders
		to demand the repurchase, including obtaining of documents from
		Shareholders subject to submission to the tax agent
Call	for	Call for Repurchase of all or part of Shares of Detsky Mir PJSC in
Repurchase	accordance with Articles 75 and 76 of the Federal Law "On Joint-Stock
		Companies"
IE		Individual Entrepreneur
PIT		Personal Income Tax
TC RF		Tax Code of the Russian Federation
RF		Russian Federation
DTT		Double Tax Treaty

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	TABLE OF CONTENTS
TERMS .........................................................................................................................................................	3
SECTION 1 INDIVIDUALS AND INDIVIDUAL ENTREPRENEURS ...................................................	5
1.	Tax effects for individuals - residents of the Russian Federation .......................................................	5
1.1.	Procedure for determining tax domicile..............................................................................................	5
1.2.	Performing the functions of a tax agent ..............................................................................................	5
1.2.1. Performing the functions of a tax agent, if a Shareholder, being an individual, sends a Call for
	Repurchase independently ..................................................................................................................	5
1.2.2. Performing the functions of a tax agent if a Shareholder, being an individual, acts through a broker
	(trustee) ...............................................................................................................................................	6
1.2.3. Provisions applicable to a Shareholder, being an individual, acting as an individual entrepreneur ...	6
1.3.	Documents required and tax payment deadlines.................................................................................	7
1.3.1.	List of documents to be submitted ......................................................................................................	7
1.3.2.	Method and deadline for submission of supporting documents..........................................................	8
1.3.3.	Method of certification of supporting documents...............................................................................	9
1.4.	Tax rates..............................................................................................................................................	9
1.5.	Tax benefits and tax deductions........................................................................................................	10
1.5.1. Investment tax deduction ..................................................................................................................	10
1.5.2. Tax benefit for Shareholders who have held Shares on the basis of the right of ownership for more
	than five years ...................................................................................................................................	11
2.	Tax effects for individuals - non-residents of the Russian Federation..............................................	11
2.1.	The procedure for determining the taxable base and tax domicile ...................................................	11
2.2.	Performing the functions of a tax agent ............................................................................................	12
2.2.1. Performing the functions of a tax agent, if a Shareholder, being an individual, sends a Call for
	Repurchase independently ................................................................................................................	12
2.2.2. Performing the functions of a tax agent if a Shareholder, being an individual, acts through a broker
	(trustee) .............................................................................................................................................	12
2.3.	Documents required and tax payment deadlines...............................................................................	13
2.3.1.	List of documents to be submitted ....................................................................................................	14
2.3.2.	Method and deadline for submission of supporting documents........................................................	15
2.3.3.	Method of certification of supporting documents .............................................................................	15
2.4.	Tax rates............................................................................................................................................	16
2.5.	Tax benefits.......................................................................................................................................	16
2.5.1. Tax benefit for Shareholders who have held Shares on the basis of the right of ownership for more
	than five years ...................................................................................................................................	16
2.5.2. Application of benefits provided for by DTT ...................................................................................	17
SECTION 2 LEGAL ENTITIES ................................................................................................................	19
Annex No. 1 to the Letter of Information ...................................................................................................	20

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SECTION 1 INDIVIDUALS AND INDIVIDUAL ENTREPRENEURS

The income of an individual, being a shareholder, from the sale of shares, including the Shares sold on the basis of the Call for Repurchase, is subject to personal income tax and inclusion in the taxable base of such an individual in accordance with cl. 1 of Article 210 of the Tax Code of the Russian Federation (see also clause 1.5 "Tax benefits and tax deductions" for information on tax benefits and deductions that are provided for certain categories of individuals - Shareholders). In such case, the taxable base for personal income tax can be reduced by actually incurred and documented expenses that are associated with the acquisition and storage of sold shares.

The tax rate depends, among other things, on whether the Shareholder, being an individual, is a tax resident of the Russian Federation (sub-clause1 of Section 1 below) or a tax non-resident of the Russian Federation (sub-clause 2 of Section 1 below).

1. Tax effects for individuals - residents of the Russian Federation

1.1. Procedure for determining tax domicile

According to the general rule (cl. 2, Article 207 of the Tax Code of the Russian Federation), individuals who actually stay in the Russian Federation for at least 183 calendar days within 12 consecutive months are recognized as tax residents of the Russian Federation.

If Detsky Mir PJSC acts as a tax agent when paying the Shareholder the purchase price for the Shares acquired on the basis of the Call for Repurchase (see clause 1.2 below), in order to confirm the status of a tax resident of the Russian Federation, the Shareholders, being individuals, shall submit to IRC - R.O.S.T. JSC, authorized by Detsky Mir PJSC to receive documents, the information in accordance with the Questionnaire (Appendix No. 1 to this Letter of Information).

The specified information shall be submitted before the deadline for accepting the Calls for Repurchase. The procedure and terms for submitting supporting documents are specified in clause 1.3 of this Letter of Information.

1.2. Performing the functions of a tax agent

1.2.1. Performing the functions of a tax agent, if a Shareholder, being an individual, sends a Call for Repurchase independently

As per paragraph 3 of cl. 1 of Article 226 of the Tax Code of the Russian Federation, Russian organizations that make payments under securities purchase and sale agreements concluded by them with taxpayers are recognized as tax agents for personal income tax purposes in relation to securities purchase and sale transactions. The exceptions are set forth in cl. 2 of Article 226.1 of the Tax Code of the Russian Federation, according to which, among other things, if such transactions are carried out for the benefit of the taxpayer by a trustee or broker on the basis of a trust agreement, a brokerage agreement, a fiduciary agreement, a commission agreement or an agency agreement with a taxpayer, then the functions of a tax agent are assigned to such trustee or broker.

Therefore, if a Shareholder, being an individual, sends a Call for Repurchase independently (without involving trustees or brokers acting on behalf of such a Shareholder), including through a nominee, Detsky Mir PJSC will be recognized as a tax agent (cl. 1 of Article 226 of the Tax Code of the Russian Federation) and will be obliged to assess the personal income tax and withhold it from the purchase price payable to

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