Dividend Taxation Procedures

MD Medical Group has been a Russian tax resident since 1 January 2015, and pays dividends in line with the Russian Tax Code.

Under the Russian Tax Code, dividends paid by Russian companies are generally subject to a tax rate of 15%. A reduced rate may be applied in the case of Russian tax residents and residents of foreign jurisdictions whose Governments have signed a double taxation treaty (“DTT”) with the Government of Russia. Countries that have signed a DTT with Russia are listed in Appendix 1. Terms for applying a reduced tax rate for certain countries are set out in Appendix 2. Information regarding terms for other countries not included in the file is available on request from MDMG.

MD Medical Group acts as a tax agent and withholds tax in order to transfer it to the Russian tax authorities when paying dividends. 

Shareholders have the right to reclaim taxation withheld by the Company from the Russian tax authorities, or to apply to MDMG for reduced tax rate treatment. Shareholders should provide documents including but not limited to the following in order to apply for reduced tax rate treatment:

1. Documents confirming ownership of shares or GDRs of the Company as of 5 June 2015 (the record date for eligibility to receive the dividend); 

2. Certificate of tax residency (or other similar document); 

3. Letter of guarantee confirming that that person is the beneficial recipient of the dividend; 

4. Documents confirming the credentials of the signatory of the letter of guarantee. 

More information about the conditions for applying the reduced rate of taxation and the requisite documents is set out in Appendixes 2 and 3.

Originals of the documents confirming the right to receive reduced taxation rates on the dividends should be sent to the Company no later than 26 June 2015. Scanned copies of the relevant documents may be sent to the Company in the first instance to verify that the documents are correct and sufficient to allow application of the reduced tax rates.

MD Medical Group reserves the right to demand any additional documents or information necessary to confirm the right of an investor to receive the dividend with taxation applied at the reduced rate.

In the event that the necessary documents or information are not provided on time or in full, the Company in accordance with the Russian Tax Code is obliged to apply taxation at 15% when paying the dividend. In this case shareholders have the right to apply independently to reclaim taxation from the Russian tax authorities.

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MD Medical Group operates in the highly attractive Russian private healthcare service market and has a leading position in high-quality women's health and paediatrics. The company manages 23 modern healthcare facilities, including 4 hospitals and 19 outpatient clinics in Moscow, St. Petersburg, Ufa, Perm, Samara and Samara region, Novosibirsk, Irkutsk, Yaroslavl and Ryazan. In addition, 3 franchised outpatient clinics operate in Kyiv, Ukraine. 

In 2014, there were 4,550 deliveries; IVF cycles amounted to 7,654. Number of outpatient treatments totalled 818,636 and number of in-patient days reached 35,900. The Company's shares have been listed on the London Stock Exchange (LSE ticker "MDMG") in the form of Global Depositary Receipts (GDRs) since 12 October 2012.