Where can I buy and/or sell Istrabenz shares?
Who is entitled to a dividend payment?
How are the dividends paid out?
What about my personal income tax return and capital gains?
Who do I have to notify about a change of address?
What is the procedure for transferring securities based on inheritance and for the payment of inherited dividends?

Where can I buy and/or sell Istrabenz shares?

The Istrabenz shares are listed on the Ljubljana Stock Exchange, coded ITBG. If you wish to buy or sell them, the transaction can be conducted via members of the Ljubljana Stock Exchange (brokerage companies, banks etc.). The list of Ljubljana Stock Exchange members is published on the website of the Ljubljana Stock Exchange. When selling or buying shares, the following documents have to be submitted to the Ljubljana Stock Exchange member: personal identification document, tax number, personal account number, share certificate and an excerpt on the status of the holder's account issued by the Central Securities Clearing Corporation - KDD (Centralno klirinško depotna družba, d.d.) Ljubljana, Tivolska 48, 1000 Ljubljana. Applications for the excerpt on the status of the holder's account may be made at the KDD website and you can also request one by phone.

KDD keeps a record of the Istrabenz shareholders and their stakes, which is why the shareholders have to report to KDD everything relating to:
• a change in personal data (first name and family name, address etc.);
• inheritance arrangements;
• a request for a change of identification number; and
• applications for an excerpt on the status of a holder's account.

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Who is entitled to a dividend payment?

All shareholders who are on the day specified in the resolution of the General Meeting of Shareholders at a certain time (the cut-off date of the Share Register) entered as holders of shares with the Central Securities Clearing Corporation (KDD) are entitled to dividends. Shareholders who sell their shares prior to that date or buy shares after that date are not entitled to dividends under the resolution of the General Meeting of Shareholders.

The resolution of the General Meeting of Shareholders determines the gross dividend amount per share.

Shareholders – natural persons – receive net dividends. The difference between the gross and net amount represents withholding tax of 20 percent, calculated and paid by Istrabenz, and deemed final tax. According to the applicable legislation, data about the dividends received and about the withholding tax paid no longer need to be entered in one’s tax return as of 2006.

Dividends comprise the revenues of legal entities and thus form the corporate income tax base. Upon the payment of a dividend, a 25-percent withholding tax has to be deducted and paid. This applies to both residents of the Republic of Slovenia and non-residents, unless a different tax rate is specified in the Agreement on the Avoidance of Double Taxation concluded between Slovenia and the recipient's domicile country.

Regardless of the general legal provision, legal entities may receive gross dividends if they meet the conditions stipulated in item 3 of the second paragraph of Article 68 of the Corporate Income Tax Act (ZDDPO-1).

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How are dividends paid out?

After the General Meeting of Shareholders, all shareholders receive written notifications of the dividend amount they are entitled to, and the date and method of dividend payment.

Prior to that, the shareholders are notified about any missing or inaccurate data on which basis the dividends are to be paid (personal account number and tax number). Shareholders who receive such a notification and all those whose data have changed after being submitted must send the relevant data within the shortest time possible to the following address:

Istrabenz, d.d.
Cesta Zore Perello - Godina 2
6000 Koper
Also to: Delniška knjiga (Share Register)
or by fax to the following number: 05 662 1515

The regulations allow for dividends to be paid to natural persons in cash provided that the net dividend is below the prescribed amount, which was SIT 22,500.00 in 2005. If the net dividend exceeds the above amount, it has to be credited to the shareholder's transaction account.

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What about my personal income tax return and capital gains?

Dividends received represent a natural person’s income liable to personal income tax. The tax base is the gross dividend. Shareholders who in the past year received dividends will report them for the last time in the 2005 tax return. According to the amendment to the Personal Income Tax Act applying since 1 January 2006 income from dividends received will no longer be included in the annual tax base.

Shareholders who disposed of their shares in the past year have to file a capital gains tax return by 28 February if the disposal took place less than three years from the date they acquired the shares. The taxable base equals the difference between the equity selling price and the equity value at the time of the acquisition (with a consideration of the purchase cost).

The return need not be filed if the gains arose from the first disposal of shares acquired in the company’s ownership restructuring process or were obtained through inheritance during such a process.

The novelty introduced by the Personal Income Tax Act in 2006 is that capital gains are subject to a 20 percent tax rate for twenty years, with the rate decreasing every five years during the period the shareholder is an equity holder, namely:

• after five years – 15 percent income tax rate;
• after ten years – 10 percent income tax rate;
• after fifteen years – 5 percent income tax rate; and
• after twenty years – 0 percent income tax rate.

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Who do I have to notify about a change of address?

Since 1 January 2005 the Central Securities Clearing Corporation (KDD) has been entering changes in natural persons' data through the electronic capture and transfer of data from the Central Register of the Population. Natural persons who are holders of securities therefore no longer need to file applications for a change in personal data.

Entities not registered in the Central Register of the Population (legal entities and natural persons who are foreign citizens and non-residents) and natural persons whose KID (registry identification number) is entered in the Central Register instead of a PIN are exempt from the above. The change of their personal data can be entered by the Central Securities Clearing Corporation only on the basis of their request. Instructions are available at the KDD website.

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What is the procedure for transferring securities based on inheritance and for the payment of inherited dividends?

Securities are not transferred from the deceased holder's account to the heir's (heirs') account automatically, but only on the basis of a request filed with the Central Securities Clearing Corporation (KDD) by the heir(s). The instructions for the transfer are available at the KDD website.

After obtaining a certificate of share transfer from KDD, send a photocopy to Istrabenz, d.d., Cesta Zore Perello - Godina 2, 6000 Koper, adding the tax number and the heir's personal account number for the payment of inherited dividends.

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