ARCO VARA AS - NASDAQ OMX Baltic

DIVIDENDS AND DIVIDEND POLICY
The Offer Shares will be eligible for dividends, if any, declared in respect of the financial year
commencing on 1 January 2007, and for subsequent periods. Once the share capital increase relating to
the issue of new Offer Shares has been registered with Estonian Commercial Register, the new Offer
Shares will rank equally with the outstanding Shares for any dividends.
The Company has paid dividends in the past and for the results in 2005 and 2006 approximately 15 per
cent of net profit of the Group was allocated for gross dividends that include the corporate tax on
profit distributions. The table below shows the dividends on Shares that the Company has declared for
the last three financial years:
2004 2004
(adjusted) 2)
52
2005 2006 2006
(adjusted) 3)
Aggregate amount of dividend declared 1) , EEK 7,792,000 7,792,000 11,692,161 25,430,000 25,430,000
Number of Shares 8,400 27,255,468 30,453,037 30,453,037 67,784,150
Dividend per Share, EEK 927.62 0.29 0.38 0.84 0.38
1) Net dividends paid to the shareholders of the Company.
2) Adjusted to reflect the bonus issues carried out in 2005.
3) Adjusted to reflect the bonus issue carried out in 2007.
The Company expects to continue paying dividends in the future and to maintain the aggregate
amount of gross dividends at the level of 15 per cent of the annual net profit of the Group. However,
the Company cannot assure that dividends will be paid in the future or if dividends are paid, how
much they will amount to. The declaration and payment by the Company of any future dividends and
the amount thereof will depend on the Company’s results of operations, financial condition, cash
requirements, future prospects, profits available for distribution and other factors considered by the
Management Board to be relevant at the time. Therefore, dividends paid historically are not
representative of dividends to be paid in the future.
Moreover, certain Group companies and Joint Ventures have entered into loan agreements with
financial institutions, which prohibit or restrict the relevant Group company or Joint Venture to pay
dividends without the prior consent of the respective lenders. Certain loan agreements of the Group
and Joint Ventures also set forth the obligation of the relevant Group company or Joint Venture to
retain certain financial levels and ratios throughout the term of such agreements. The shareholders’
agreement relating to Arco & Koger Investeeringute OÜ, a 50-50 joint venture with OÜ Koger
Kinnisvara, prohibits the distribution of dividends during the first three years of operation. Such
restrictions and obligations may effectively reduce the amount of funds available for dividend
payments.
As to the tax considerations applicable to dividends, see “Taxation”. As to the procedure and
regulatory restrictions relating to the payment of dividends, see “Company, Share Capital and
Ownership Structure – Shareholder Rights – Dividends and other distributions”.