We pursue a long-term strategy of stable dividend growth and allocate at least 50% of majority shareholder net profit to dividend payouts.

STABLE DIVIDEND GROWTH STRATEGY

Over the last ten years Krka’s dividend growth rate has averaged 14.1%. Dividends are paid annually on the day following the record date confirmed at the AGM at which shareholders decide on the proposed dividend amount.

Gross dividend per share (in EUR)

1.60 2012 2.10 2013 2.20 2014 2.65 2015 2.75 2016 2.90 2017 3.20 2018 4.25 2019 5.00 2020 5.63 2021

Dividend yield* (in %)

3.2 2012 3.5 2013 3.7 2014 4.1 2015 5.2 2016 5.0 2017 5.5 2018 5.8 2019 5.5 2020 4.8 2021

*Dividend yield: dividend for the year/share price at the beginning of the year

REGULAR DIVIDEND PAYMENTS TO SHAREHOLDERS

Krka has been making dividend payments to its shareholders every year since 1997 when it started operating as a publicly listed company. Dividends are paid to all shareholders registered as owners of Krka shares on the record date. Dividend payout is managed by the Central Securities Clearing Corporation (Centralna klirinško depotna družba – KDD) and its members.

The dividend decision and the date of dividend payout is taken by the shareholders at the AGM.

DIVIDENDS ARE PAID TO ALL SHAREHOLDERS REGISTERED AS OWNERS OF KRKA SHARES ON THE RECORD DATE

Dividends are paid to all shareholders registered at KDD as owners of Krka shares on the record date fixed in the AGM resolution. Any changes in the ownership of shares entered in the shareholder records take into account the settlement date of T+2. This means that shareholders receive dividends for all shares, including shares they obtained at least two business days before the record date.

For each stock, the Ljubljana Stock Exchange publishes the ex-dividend date, meaning those who purchased the stock on this date will not be eligible to receive the declared dividend.

In accordance with the uniform European standards for corporate actions, which also cover dividend payouts, Krka does not make dividend payments directly to shareholders. Dividend payments are managed by the KDD and its members, i.e. brokerage companies and banks that keep financial instruments accounts for individual owners of Krka shares.

In addition, KDD members handle the dividend payout and withhold the dividend tax.

Dividends that domestic retail investors receive are taxed at 25%. When the dividend payment is made this tax is withheld and transferred to the tax authority. Domestic natural persons receive a net dividend payment corresponding to 75% of the total gross dividend amount. Dividends are not included in the indicative calculation of personal income tax as tax withheld is considered a final tax on the earnings of a domestic natural person. Among others, taxation of dividends owned by foreign investors depends on Double Taxation Treaties concluded between Slovenia and the country or countries in question.

FREQUENTLY ASKED QUESTIONS

Information about your account balance is managed by the Central Securities Clearing Corporation (KDD), where you can request an annual account balance statement or an account balance statement showing the balance on a certain date. For more information, visit the Central Securities Clearing Corporation (KDD) website or contact the bank or the brokerage company where you have your brokerage account.

If you want to buy or sell Krka shares, you must have a brokerage account at a bank or a brokerage company that is a member of the Ljubljana Stock Exchange (see list of members). When you have opened the account, you can place an order to buy or sell shares.

Ljubljana Stock Exchange Regulations and the Slovenian Companies Act stipulate that the management board of a company must convene an annual general meeting once a year. The AGM notice shall be published at least thirty (30) days before the AGM on the website of the Slovenian business register AJPES. It shall also be published in the company’s printed or electronic newsletter if available at the time of the notice, and on the company’s website. The AGM notice shall also be published in accordance with the law governing the financial instruments market. Any KRKG shareholder can attend the meeting and exercise his or her voting rights, either in person or through an appointed proxy.

Shareholders may attend the Annual General Meeting and exercise their voting rights if they give notice of their attendance and are registered as shareholders in the central securities registry on the cut-off date. Eligibility criteria for attending the meeting and exercising voting rights are specified in the AGM notice.

Shareholders’ voting power depends on their equity share. Each voting share carries one vote. Shareholders can also exercise their voting rights through a dully appointed proxy, a financial institution, or shareholders’ association. Treasury shares have no voting rights.

Heirs must make all arrangements regarding the Krka share transfer at the KDD system member that keeps the account of the deceased person or the heir or directly at the Central Securities Clearing Corporation (KDD). In both cases, the heir must have a brokerage account at the KDD system member. For more information, visit the Central Securities Clearing Corporation (KDD) website.

Natural persons resident in the Republic of Slovenia are liable to pay 25% tax on dividends. The tax is deducted when the dividends are paid out and remitted to the tax office. Natural persons receive net dividends, accounting for 75% of the gross dividend. For more information, visit the website of the Financial Administration of the Republic of Slovenia.

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