Dalekovod d.d.

Environmental & Social Information • Jun 29, 2024

DALEKOVOD GROUP SUSTAINABILITY REPORT

JUNE, 2024

OUR MISSION

Develop and maintain business relationships with domestic and foreign partners, ensuring high quality standards in the field of engineering, manufacturing and construction of electric power, road, rail and telecommunications infrastructure based on years of knowledge and tradition, innovation and strong social responsibility and confidence in the successful the implementation of all activities.

OUR VISION

Become a leading international company in the provision of comprehensive and high-quality services in the field of engineering, manufacturing and construction of electric power, road, rail and telecommunications infrastructure especially by strengthening our position in foreign markets, contracting new business and penetrating into new markets, on the basis of our long-standing tradition, knowledge, competitiveness, innovation and reliability.

NAŠE VRIJEDNOSTI

Our fundamental values are based on: our employees, care for the environment, performing work and doing business in a legal and ethical manner and our relationship toward stakeholders.

PRESIDENT OF THE MANAGEMENT BOARD INTRODUCTORY

Dear Reader,

we at Dalekovod are first of all happy and proud that our basic products - design, construction and supply of materials for electric power lines and railway electrification - contribute directly to green transition and thus meet the preconditions for achieving a balance between the environment, society and our activities to meet the requirements of development, without endangering the prospects of the next generations.

Due to the nature of our work which encompasses working on unapproachable terrain, in all weather conditions, short deadlines for disconnecting voltage or closing traffic, using heavy machinery and needing to motivate younger generations to accept this kind of work, achieving such a balance is a challenging task.

However, this year, when we are celebrating the big 75-year anniversary of successful business operations, we look back with satisfaction. We are rightfully satisfied and proud of all the projects we have implemented, both the far-reaching ones, strategic on the national and international market, but also those daily ones focused on improving the satisfaction of people, their safety and well-being. We are proud of each step we took demonstrating the efforts invested in preserving the environment and nature.

We remained loyal and consistent with all the strategic business determinants by which we guarantee transparent, fair, stable and sustainable business. We continued cooperating with educational institutions, aware of the potential of young, educated and highly motivated people in regard to our company, but also the society and economy in Croatia.

The report we have been preparing for the second year in a row, in the text below, through details, statistical data and descriptions reflects our continued commitment to sustainability and stability in each business segment.

Once again, in 2023, our business was based on taking care of each other, developing projects dedicated to each detail and step in the process, while taking care of the environment and the community.

As with each transaction of major value, there have been plenty of challenges, but together, guided by the idea of team success and dedicated to excellence, we have proved that the values we nourish are the best pointer to a correct, proper and safe way to success and growth.

Our dedication to people and their well-being is reflected in creating a safe, stimulating and inclusive work environment. The strong team spirit we continuously nourished was thus the key precondition for realizing the set objectives and achieving results at all levels.

Investing in the development and safety of our employees, we not only ensure their future, but also the future of our company. We promote responsible and efficient resource management and use of energy, we invest in new technologies. Each of our projects have set deadlines, required quality and defined performance indicators, but the care for a better, safer, healthier and greener world does not follow a workflow, meaning our job in that sense is never done. There is always room for that additional step forward, some extra effort, which is why we remain dedicated to the idea of building a more responsible, positive and sustainable business. We don't see our responsibility toward nature as an obligation, but as an opportunity to create new values for all the actors and the society as a whole. We also described our commitment to sustainability in the Sustainability Strategy, which we started working on in 2023 and adopted in mid-2024.

The business successes we achieved last year are a result of strategic decisions, committed and transparent work and cooperation within the entire organization, and the results summarized below are only part of the puzzle we are working on together wishing for a greener, better and healthier future. The care for people, the community and the environment and fair management of all internal and external business processes were, are and will be the key determinants of the business operations of Dalekovod Group. We believe that the mission and vision we were guided by in the last 75 years, with ESG principles we committed to abide by, will continue to lead Dalekovod in the right direction in the years to come.

Eugen Paić-Karega

About Dalekovod Group1
Products, services and value chain 5
Corporate Governance 12
Strategies, policies and business practices 18
Material topics 25
2022 business performance indicators 28
Company information 76

About Dalekovod Group

FROM OUR BEGINNINGS TO THE PRESENT

We were founded in 1949, under the name Dalekovod, as a state-owned company for the construction and installation of transmission lines and substations. In those years, we performed reconstruction works on the existing distribution network and stations, carried out the construction of the 110 kV transmission line Vinodol – Rakitje and Vinodol – Matulji, as well as numerous other 35 and 10 kV transmission lines and low-voltage networks. Shortly after, in addition to performing construction and installation works, our company started to design and produce power facilities. At the start of the 60s, Dalekovod made significant advances in foreign markets in Togo, Cambodia, Pakistan and Guinea. A decade later, we became a part of the activities related to the commissioning of the strategically important 400 kV network called the "Nikola Tesla" ring. Our workers have continuously demonstrated their knowledge and ability from the very beginning – they also participated in the repair of the 400 kV Konjsko – Melina transmission line route, when Velebit, Kapela and parts of the Slovenian coast were affected by freezing rain that lasted several days in the 80s, and ice deposits collapsed and damaged more than 90 towers.

Dalekovod participated in the construction of the 400 kV transmission line Melina – Tumbri, a very important line for the functioning of the split electricity system at the beginning of the Croatian War of Independence. At the end of the 90s and the start of the new millennium, Dalekovod was engaged in the reconstruction of transmission lines and substations throughout Croatia and the construction of numerous capital power facilities. The projects abroad, in Norway and Greenland and Iceland, intensified shortly after, and we also participated in the construction of the 400 kV transmission line Tirana – Podgorica in Albania and Montenegro. The real venture was the design, construction and commissioning of the 390 km long 500 kV transmission line Agadyr – YukGres in Kazakhstan. Today, Norway and Sweden are the primary markets for the company and generate most of the revenue.

In addition to its activities in the primary energy sector, in the last 20 years, Dalekovod has made significant advances in the transport and ICT sector and has equipped numerous tunnels in Croatia, with a total length of 80,473 m – Sveti Rok, Mala Kapela and Sveti Ilija on Biokovo. Aside from equipping the tunnels, the experts at Dalekovod have carried out numerous other works on roads and motorways – ranging from relaying and protection of installations, installation of traffic equipment and signalling systems, power supplies and lighting to the installation of telecommunications equipment and the manufacturing and installation of guard rails and wire fences. Additionally, Dalekovod participated in the construction of the Kresimir Ćosić Hall in Zadar and Arena Spaladium in Split, as well as in the extension of the ambulance building in Zagreb and Dubrovnik Airport.

In 2009, Dalekovod's shares were included on the official list of the Zagreb Stock Exchange, and a year later, advances were made toward the design and construction of renewable energy sources, i.e. wind turbines.

In addition to the new sectors, Dalekovod has continued to achieve success in the primary energy sector. This was followed by a number of challenging years for Dalekovod. The period was marked by the beginning and successful completion of operational and financial restructuring, the decline of economic activity during the pandemic, the energy crisis and the unstable geopolitical situation. However, Dalekovod has always been able to come out on top. Our main strength lies in our workers, and their readiness to work and acquire new knowledge and skills, while improving the existing ones in line with rapid changes and new technologies in the energy, transport and ICT sectors.

THE DALEKOVOD GROUP IN 2023

GRI 2-1

In more than seven decades of its existence, Dalekovod has grown into a company whose quality has been recognized in more than 80 countries all over the world. In 2023, Dalekovod Group comprises companies that have their headquarters in Croatia: Dalekovod d.d., Dalekovod Projekt d.o.o., Dalekovod MK d.o.o. (on 18 January 2024, the company Proizvodnja MK d.o.o. changed its name to Dalekovod MK d.o.o.), Dalekovod OSO d.o.o. (on 22 December, the company Proizvodnja OSO d.o.o. changed its name to Dalekovod OSO d.o.o.), Dalekovod EMU d.o.o. and Cinčaonica usluge d.o.o. u likvidaciji (under liquidation).The Dalekovod Group also includes companies, subsidiaries and representative offices abroad

Dalekovod's shares are located on the official market of the Zagreb Stock Exchange under the stock symbol DLKV, We are therefore obliged to do business not only in accordance with our positive management practices but also with the principles of the Zagreb Stock Exchange Corporate Governance Code.

After the completion of the financial restructuring procedure of Dalekovod and the election of new members of the Supervisory Board in March 2022, the conditions were created for acquiring supervision of the Dalekovod Group companies and inclusion in Končar's business activities and consolidated financial and non-financial statements. The company Napredna energetska rješenja d.o.o. became the majority owner of Dalekovod with more than 75 % share, and institutional investors registered and paid in HRK 100 million. After the company KONČAR - Ulaganja d.o.o. (in one-hundred percent ownership of Končar - Elektroindustrije d.d.) accepted the offer of the company Construction Line Limited (CL) for the repurchase of the share in the company Napredna energetska rješenja d.o.o., in October 2023, and after all the obligations foreseen by the relevant legislation, which are a precondition for concluding the transaction, have been met, CL and KONČAR - Ulaganja d.o.o. carried out the share transfer on 6 June 2024. In this manner, the company KONČAR - Ulaganja d.o.o. became the only member of the company Napredna energetska rješenja d.o.o., and thus also the holder of 75.16 % of the shares of Dalekovod d.d.

The transaction and the entry of the relevant change in the court register of the Commercial Court in Zagreb completed the process of the financial restructuring of Dalekovod Group and its integration into KONČAR Group.

Thus, Dalekovod continued its successful business in synergy with KONČAR Group and strengthens its position of a reliable partner in design, production and construction, renovation and modernization of the power transmission and distribution network as well as traffic - road and railway infrastructure.

		Dalekovod Group's companies headquartered in the Republic of Croatia, form of ownership and markets

Name, legal form and ownership	Ownership	Headquarters	Markets
Dalekovod d.d.	Private after conversion	Marijana Čavića 4 Zagreb	In 2023, The Dalekovod Group's companies
Dalekovod Projekt d.o.o.		Republic of Croatia	operated in the markets
Dalekovod MK d.o.o.			of Croatia, Slovenia,
Dalekovod OSO d.o.o.		Vukomerička ulica 9 Velika Gorica	Bosnia and Herzegovina,
Cinčaonica usluge d.o.o. in liquidation	Wholly owned by Dalekovod d.d.	Republic of Croatia	Norway, Sweden, Finland, Italy, Slovakia,
Dalekovod EMU d.o.o.		43. ulica br. 36 Vela Luka	Macedonia, Kosovo, Montenegro, Ukraine, Ireland, Iceland and
		Republic of Croatia	Cyprus

SUSTAINABILITY REPORTING

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Dalekovod d.d. is a member of the UN Global Compact and we have been publishing Social Responsibility reports since 2010. By becoming a member, we have committed to continuously adjust and improve our business with an emphasis on human rights, labor law, environmental protection and responsible corporate governance.

Taking into account the long-term history of Dalekovod's operation, the achievements in the domestic and foreign markets, the readiness of our employees to accept and solve challenges using new technologies and openness to acquire new and improving existing knowledge and skills, in 2022, we decided to prepare a Report on Business and Sustainability of the Dalekovod Group.

As a continuation of our last year's report which, after years of various forms of non-financial reporting, was the first of its kind from Dalekovod Group, this Report on Business and Sustainability of Dalekovod Group for 2023 (hereinafter: the Report) contains updated information on changes and progress in relation to the previous period. We prepared the Report according to consolidated GRI standards from 2021 and published it on the Dalekovod Group's website.

The Office for Corporate Communications is responsible for the preparation and publication and inquiries about the Report, e-mail: glasnogovornik@dalekovod.hr.

The Report includes the Dalekovod Group companies with headquarters in Croatia.

The audited Consolidated and Non-consolidated Financial Statement for 2023 also includes Dalekovod Ljubljana d.o.o. with headquarters in Ljubljana, Slovenia and Dalekovod Mostar d.o.o. with headquarters in Mostar, Bosnia and Herzegovina. The Report and the audited Consolidated and Unconsolidated Financial Report for 2023 shall refer to the same period from 1 January to 31 December 2023.

The auditor of the Consolidated and Non-Consolidated Financial Report for 2023 has determined the compliance of the content of the Report on Business and Sustainability for 2023 with the content prescribed by Article 21 of the Law on Accounting.

Products, services and value chain GRI 2-6/2-7/2-8/2-29/2-30/401-1

PRODUCTS AND SERVICES

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The Dalekovod Group's companies provide design, manufacturing and construction services in the energy, road and rail transport sectors.

Products and services of the Dalekovod Group

Products and services	Design	Manufacturing	Construction	EM field measurement and meter calibration
TRANSMISSION LINES (TL)	TL up to the voltage level of 750 kV	Suspension and jointing equipment up to 750 kV, steel structures, steel lattice and polygonal TL towers up to the voltage level of 750 kV	TL up to the voltage level of 750 kV	-
TRANSFORMERS (TS)			TS to voltage
	TS to voltage level of 400 kV	Busbars, jointing equipment, steel structures	level of 750 kV Installation, testing, equipment and commissioning	-
		Lighting columns and	Equipping tunnels,
	Electrical supply,	fences	roads and highways	Measurement and
INFRASTRUCTURE	cables, lighting	Portals and road equipment	Construction of power supplies and	testing of low- and high-frequency electromagnetic
	Overhead contact line and	Portals and overhead	overhead contact line for railway	fields
	railway power supply	contact line	infrastructure	Meter calibration
		for railway infrastructure	Construction of halls and industrial plants

DESIGN AND CONSTRUCTION

Dalekovod has constructed more than 15,000 kilometers of lines of up to 750 kV, OPGW (Optical Ground Wire) cables in a total length of more than 4,000 km, more than 700 base stations for GSM mobile phones, more than 500 km of projects for road and highway infrastructure and 23 tunnels.

Dalekovod d.d. is specialized in the performance of turnkey contracts. In Dalekovod d.d., coordinated activities include the development of technical documentation, offering, planning and managing construction projects to implementation, for all overhead and underground lines with the voltage level of 0.4 kV to 750 kV, substations up to 750 kV, antennas of all purposes and types and infrastructure facilities (roads, railways, gas, water) and industrial buildings.

Dalekovod Projekt d.o.o. performs design, supervision, consulting and engineering activities, and this includes the development of conceptual, main and execution designs, depending on the requirements of the investor. Dalekovod Projekt is implementing projects related to the transmission and distribution of electricity, renewable energy sources, projects in the ICT sector and the road and rail transport sector in Croatia and abroad.

MANUFACTURING

Manufacturing activities are carried out in two companies, Dalekovod MK d.o.o. and Dalekovod OSO d.o.o.

Manufacturing activities refer to the suspension and jointing equipment for power facilities, in particular, transmission lines from 0.4 to 1000 kV and metal structures for substations of all types and voltage levels up to 500 kV, telecommunication facilities and all types of networks and antennas, metal parts for roads – road lighting, security fences and signaling, metal parts for tunnel lighting, metal traffic management equipment and metal parts for equipment for the electrification of railway lines and trams in cities.

Until now, we have delivered more than 15,000 tons of metal structures and 3,500 tons of suspension and jointing equipment for the implementation of our projects in more than 40 countries around the world.

In 2023 Dalekovod MK d.o.o. manufactured and processed 3.380 tons of metal structures, i.e. about 16 per cent less than in 2022. The reduction in production and processing was influenced by a change in the product range (the share of the range with a higher share of work and value increased) in the total volume of production both on the domestic and foreign markets.

Dalekovod OSO d.o.o. produced and processed 1,987 tons of suspension and connection material, which is a 40-percent increase in relation to the same period last year. An increase in quantitative indicators is a result of the Book of Contracted Works being completed well, which has a favorable effect on income stability in the next period.

ELECTROMAGNETIC FIELD MEASUREMENT AND METER CALIBRATION

Activities of measuring and testing high- and low-frequency electromagnetic fields and calibration of electrical energy meters were carried out during 2023 in the company Dalekovod EMU d.o.o. The calibration of electrical energy meters was performed for companies possessing sources of highfrequency and low-frequency radiation, as well as for the calibration performed in the company's calibration station in Vela Luka for the needs of HEP- Operator distribucijskog sustava d.o.o..

QUALITY CONTROL

To deliver quality products to customers, Dalekovod conducts continuous quality control during the manufacturing process consisting of: control of input material that must meet the required specifications, interim control, final control of the finished product according to customer requests, testing at takeover when the product is controlled by the customer, and control of the documentation submitted to the customer, according to the prescribed operating procedures. The testing and quality control of our products is carried out by Dalekovod Laboratory for electromechanical and chemical testing. The Dalekovod Laboratory is fully structured according to HRN EN ISO/IEC 17025 and has all the necessary resources for operation.

OUR SUPPLIERS

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Most of our suppliers in 2022 had headquarters in the countries of the European Union. The negative effects of the pandemic, which led to a decrease in the volume of business and occasional difficulties in the supply chain, were further exacerbated by the Russian-Ukrainian crisis, which caused the rise in prices of materials and raw materials and consequently increased inflationary pressures on other costs, which also reflected on the profitability of the Dalekovod Group. Economic indicators for 2022 are described in the chapter Performance Indicators and the Consolidated and Non-consolidated Financial Report for 2023 published on our website.

Cooperation with suppliers is based on the principles and requirements deriving from ISO standards related to continuous improvement of product quality and process management – ISO 90001:2015, environmental management – ISO 14001:2115, energy management – ISO 50001:2018 and health and safety management systems – ISO 45001:2018. Operational procedures for all business processes and procedures for the procurement of products and services necessary for the manufacturing and provision of services of the Dalekovod Group's companies are defined according to the principles and requirements of the abovementioned standards. The list of suppliers is defined by internal procedures, and the verification of new suppliers is carried out by Dalekovod workers in quality control. New suppliers that have implemented certified systems according to ISO 9001, ISO 14001, ISO 50001 and ISO 45001 are

automatically included on the list of eligible suppliers, while those who do not have certified systems undergo a verification procedure using a questionnaire. In the questionnaire, new suppliers fill out data on the environmental impacts of business operations, respect for labor and human rights, non-discrimination and equal opportunities for all workers, management practices in accordance with anti-bribery and anticorruption ethical principles and child labor avoidance.

We evaluate significant suppliers at the end of each year, taking into account the quality of performance and delivery within the given deadlines. We determine significant suppliers based on the type of business relationship, participation in significant projects and the monetary value of payment for goods, services and works. The number of suppliers varies significantly from year to year and depends on the projects we carry out, as well as the goods, services and works we procure. The selection of suppliers often begins at the phase of project offering, when potential suppliers and tender conditions are defined, and investors also often define within the tender documentation in advance several suppliers whose equipment is used in the implementation of the project. The result of the work gained in the tender is the signing of contracts with the best suppliers of equipment for each individual project. Annual contracts are concluded with suppliers for scheduled procurements, which are repeated regardless of the projects themselves. Other annual contracts refer to services and certain materials the procurement of which is carried out independently of the projects themselves The General Terms and Conditions of the Dalekovod Group are also publicly available on our website. Article 10 regulates the information, material declaration, hazardous substances in electrical and electronic equipment (RoHS), packaging, hazardous cargo and environmental protection are regulated, and Article 11 regulates anti-bribery and anti-corruption procedures and the Code of Conduct for contractors. In 2023, we cooperated with 24 significant tier 1 direct suppliers and there were no new suppliers.

THE DALEKOVOD GROUP'S AND SUPPLIERS' WORKERS

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THE DALEKOVOD GROUP'S WORKERS

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On 31 December 2023, the Dalekovod Group's companies employed 1,006 workers – 882 men and 124 women. The place of work for 723 workers employed in Dalekovod and Dalekovod Projekt is Zagreb, 263 employees of Dalekovod MK and Dalekovod OSO work in Velika Gorica, and 10 workers of Dalekovod EMU work in Vela Luka. Depending on the needs of active projects, a significant number of workers, especially fitters, were posted to work in the field in Croatia and abroad.

Compared to 2022, when the Dalekovod Group's companies employed 1,060 workers, the number of employees in 2023 decreased by 5,1%. In 2023, 95% of the workers were employed on a permanent basis, and 99% of the workers worked full-time. In doing so, the worker, the type of employment contract and working hours are defined according to the Collective Agreement that is in accordance with the Labor Act.

		Dalekovod		Dalekovod Projekt	MK	Dalekovod	OSO	Dalekovod		Dalekovod EMU		TOTAL
	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023
Permanent workers	642	586	88	89	107	103	157	162	10	10	1004	950
Men	580	519	63	64	104	99	137	139	7	7	891	828
Women	62	67	25	25	3	4	20	23	3	3	113	122
Temporary workers	44	45	5	3	2	6	5	2	0	0	56	56
Men	40	45	3	2	1	5	5	2	0	0	49	54
Women	4	0	2	1	1	1	0	0	0	0	7	2
UKUPNO	686	631	93	92	109	109	162	164	10	10	1060	1006
Full-time work	684	628	92	91	109	109	162	164	9	9	1056	1001
Men	619	562	65	65	105	104	142	141	7	7	938	879
Women	65	66	27	26	4	5	20	23	2	2	118	122
Full-time work	2	3	1	1	0	0	0	0	1	1	4	5
Men	1	2	1	1	0	0	0	0	0	0	2	3
Women	1	1	0	0	0	0	0	0	1	1	2	2
TOTAL	686	631	93	92	109	109	162	164	10	10	1060	1006

Workers according to the type of employment contract, working hours and sex in the Dalekovod Group in 2023

The Dalekovod Group's workers according to gender and age groups in 2023

	Dalekovod		Dalekovod Projekt		Dalekovod MK		Dalekovod OSO		Dalekovod EMU		TOTAL
	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023
Men	620	564	66	66	142	141	105	104	7	7	940	882
Women	66	67	27	26	20	23	4	5	3	3	120	124
TOTAL	686	631	93	92	162	164	109	109	10	10	1060	1006
<30	117	81	14	12	19	21	7	6	1	1	158	121
30-50	433	396	56	53	58	60	59	60	6	5	612	574
>50	136	154	23	27	85	83	43	43	3	4	290	311
UKUPNO	686	631	93	92	162	164	109	109	10	10	1060	1006

	Dalekovod		Dalekovod Projekt		Dalekovod MK		Dalekovod OSO		Dalekovod EMU		UKUPNO
	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023
Master's degree	5	4	6	5	1	1	1	1	1	1	14	12
University degree	119	111	68	68	23	25	8	8	3	3	221	215
College degree	33	41	6	5	4	5	7	8	0	0	50	59
Higher vocational qualification	67	54	1	0	20	19	39	38	1	1	128	112
Secondary school education	440	398	12	14	102	100	48	48	4	4	606	564
Semi-skilled	0	0	0	0	2	2	2	2	0	0	4	4
Unskilled	22	23	0	0	10	12	4	4	1	1	37	40
UKUPNO	686	631	93	92	162	164	109	109	10	10	1060	1006

The Dalekovod Group's workers according to professional qualifications in 2023 and comparison with 2022

The data on the education and training of workers, differences and equal opportunities, benefits and parental leave can be found in the chapter our workers, which is also one of the total eight material topics of the Dalekovod Group in 2023.

COLLECTIVE AGREEMENT

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The first collective agreement was concluded on 14 June 1996. The valid collective agreement was concluded between Dalekovod d.d. and the Croatian Construction Industry Trade Union, it applies to all workers, and the last amendments were adopted in September 2023. The collective agreement regulates working hours, leaves, occupational health and safety, wages, benefits and other cash and non-cash receipts of workers, severance payments, inventions and technical improvements, employer's liability for damage caused to the worker and prohibition of competition.

Notices relating to significant changes in business operations are published in accordance with the Labor Act and are not specifically mentioned in the collective agreement, but are given to the works council, i.e., if in a particular company of the Dalekovod Group the council has not been formed, to the chief union commissioner. Freedom of association and collective bargaining are present in all companies and all business activities of the Dalekovod Group, so collective agreements can be concluded even abroad, depending on the place of implementation of an individual project.

The following subjects are active at the level of the Dalekovod Group: Union of Metal Workers – Industrial Union (SMH-IS), SMH-IS Union Branch "Dalekovod MK" d.o.o. and the Union of Metal Workers – Industrial Union, SMH-IS Union Branch "Dalekovod OSO".

SUPPLIERS' WORKERS

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All suppliers of the Dalekovod Group fill out a supplier verification questionnaire, in which, among other things, they provide information on the number of employees. In 2023, the employees of significant suppliers of the Dalekovod Group are engaged in transportation and installation of equipment and infrastructure construction for the energy, transport and ICT sectors, as well as in insurance, maintenance, repair and rental of vehicles and organization of official trips. When conducting the procurement process, the Dalekovod Group sends questionnaires to suppliers asking for information on the impact of their operations on the environment, society and human rights in 2023. The results of the collected data from that questionnaire, as well as the results from the questionnaire on the quality of services, are scored and added up into the supplier evaluation table, and supplier evaluations are assigned, which can then influence the selection.

Corporate Governance

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GOVERNANCE STRUCTURE GRI 2-9/2-10/2-11/2-15

The governance structure of the Dalekovod Group consists of the General Assembly, the Supervisory Board and the Management Board of Dalekovod d.d.

GENERAL ASSEMBLY

The General Assembly shall be convened in cases specified by the Companies Act and the Statute of Dalekovod d.d., and it must be convened when the interests of the company so require. The General Assembly shall be convened in the first eight months of the business year. It is convened by the Management Board or the Supervisory Board. The members of the Management Board and the Supervisory Board must participate in the work of the General Assembly. The General Assembly may make valid decisions if shareholders personally, their proxies or legal representatives of shareholders who jointly hold shares whose total nominal value is at least 75 per cent of the share capital of Dalekovod d.d are represented at it. Shareholders who meet the prescribed conditions may participate in the General Assembly. Each share confers the right to one vote. The General Assembly shall be chaired by the President of the Supervisory Board or by a person designated by them.

THE SUPERVISORY BORD

The work of the Supervisory Board is regulated by the Rules of Procedure of the Supervisory Board of Dalekovod d.d., which was adopted by the Supervisory Board on the basis of the Companies Act and the Statute of Dalekovod d.d. The Rules of Procedure shall regulate issues relevant to the constitution, competence, organization, method of working and decision-making of the Supervisory Board and to the working bodies, commissions or boards under the Supervisory Board and to the keeping of business secrets.

The Supervisory Board has seven members, one of whom is appointed by the shareholder Napredna Energetska Rješenja d.o.o.; one employee representative in the Supervisory Board is appointed in accordance with the provisions of the Labor Act, and the others are elected by the General Assembly. The Supervisory Board, as well as any member of the Supervisory Board, is obliged to perform the tasks of the Supervisory Board: act in the best interest of Dalekovod d.d., act in accordance with generally accepted codes such as the Code of Corporate Governance, advocate for the prevention of conflicts of interest, advocate for procedures that prevent illegal activity and keep a business secret in accordance with the regulations and general acts of Dalekovod d.d.

The Supervisory Board supervises the management of the activities of Dalekovod d.d., gives an order to the auditor for the examination of annual financial reports of Dalekovod d.d. and the Dalekovod Group, examines whether the operations are conducted in accordance with the laws, acts of Dalekovod d.d. and decisions of the General Assembly, examines the results of the business, the correctness of the presentation of the financial and business situation in the business books of Dalekovod d.d. and submits a written report to the General Assembly, decides on giving consent on the proposal of the Management Board on the use of profit, etc. The Supervisory Board decides on the establishment of a board. The Audit Board, the Appointment and Remuneration Board and the Corporate Governance Board fall within the competence of the Supervisory Board.

Members of the Supervisory Board in 2023.

• Gordan Kolak – Chairman since 31.3.2022.
• Josip Jurčević – Deputy chairman since 1.3.2022.
• Josip Lasić – member since 31.3.2022.
• Božidar Poldrugač - member since 31.3.2022.
• Damir Spudić - member since 31.3.2022.
• Dražen Buljić appointed as a member of the Supervisory Board by decision of the Workers' Council 1.1.2020.
• Pavao Vujnovac – member shareholder od 31.3.2022.

THE MANAGEMENT BORD

The Management Board of Dalekovod d.d. shall be appointed by the Supervisory Board at the constitutive session. Members of the Management Board of Dalekovod d.d. are:

• Tomislav Rosandić President of the Management Board since 1 March 2019 and Director
• Eugen Paić-Karega Member of the Management Board and Director since 1 April 2022
• Tvrtko Zlopaša Member of the Management Board and Director since 1 April 2022
• Ivan Kurobasa Member of the Management Board and Director –until 31/3/2023

The Management Board manages the business operations according to the Companies Act, the Statute and managerial contracts as defined in the Rules of Procedure of the Management Board of Dalekovod d.d. The Rules of Procedure were adopted at the session by the Supervisory Board and published publicly. The Rules of Procedure specify the distribution of competences and the scope of activities of the President and members of the Management Board. The Management Board coordinates, directs, supervises and monitors the work in the subsidiaries of the Dalekovod Group through membership in supervisory boards, the assembly and other acts established with subsidiaries, The President of the Management Board is responsible for adopting decisions on the management of impacts related to society and human rights, the economy and the environment. The Rules of Procedure also prescribe the rules for the prevention of conflicts of interest of the members of the Management Board according to which members are not allowed to be guided by personal interest or to use business opportunities for personal purposes. The members of

the Management Board are also obliged to inform the Supervisory Board and other members of the Management Board without delay about personal interest in the affairs of Dalekovod d.d

THE ROLE OF THE MANAGEMENT BOARD IN MANAGING IMPACTS ON THE ENVIRONMENT, SOCIETY, HUMAN RIGHTS AND THE ECONOMY GRI 2-12/2-13/2-17

Sustainability goals refer to society and human rights, economy and environment, and therefore each of the Management Board members directs, coordinates and monitors the fulfilment of strategic business goals and reports to other Management Board members and proposes the adoption of decisions at sessions by means of activities for which they are responsible. The Management Board delegates responsibilities for meeting business objectives, including sustainability goals. The areas of sustainability are managed in the Department of Business Excellence, which is under the direct competence of the Management Board.

This department comprises the Protection at Work Service, the Quality Assurance and Control Service, and the Service for Management Systems and Environmental Protection. The Financial and Support Sector comprises the Human Resources Management Department. These organizational units with all other sectors, departments and services present an inseparable hole in achieving long-term business sustainability. Role of the Management Board in sustainability reporting.

ROLE OF THE MANAGEMENT BOARD IN SUSTAINABILITY REPORTING GRI 2-14/2-17

The Management Board is directly involved in the process of preparing the Report on Business and Sustainability for 2023. The initiative for preparing the Report for 2022 was launched by the Management Board. The members of the Management Board were an integral part of the working group that defined material topics at the workshop held on 17 February 2022 based on the analysis of the impact of the Dalekovod Group's business on sustainability. The Management Board also participated in the process of determining significant shareholders who participated in the evaluation of the material topics of the Dalekovod Group and provided information on their impact on the environment, society, human rights and the economy. Before the publication of the Report, the content was approved by the directors of the organizational units involved in the preparation of the Report. The Dalekovod Group's Management Board adopted the Report on Business and Sustainability for 2023.

REMUNERATION POLICIES, IMPACT ASSESSMENT OF THE MANAGEMENT BOARD AND ANNUAL FEE RATIO GRI 2-18/2-19/2-20/2-21

The remuneration system of the Dalekovod Group's Management Board members is governed by the Remuneration Policy published on our website. The Policy defines the rights of the members of the Management Board, monetary and non-monetary remunerations, fixed and variable remunerations and other rights. Fixed remunerations reflect the relevant professional experience, competence and organizational responsibility of the Management Board members. The variable part of the salary is related to the realization of the annual business plan of the Dalekovod Group concerning realized business income, the amount of normalized EBITDA, the amount of contracted jobs, the implementation of strategic business objectives which include issues related to the development of human resources, capital markets, strengthening the manufacturing and sales portfolio and specific objectives in the preparation of annual plans according to the guidelines of the Supervisory Board.

When adopting the Remuneration Policy for the members of the Management Board, the conditions of workers' remunerations and working conditions of the circle of workers of similar qualifications, knowledge, skills, competences and experience were considered, but with a lower level of responsibility, i.e. the remunerations and working conditions of the middle management were taken into account.

The Supervisory Board has established the Appointment and Remuneration Board intending to express a competent and independent opinion on remuneration policies and practices and on the incentives established for risk management. The opinion of shareholders is considered through the policy confirmation institute by the Supervisory Board selected by the shareholders. The Dalekovod Group applies internal acts defining salaries, bonuses, benefits and other remunerations.

The annual compensation ratio was calculated by dividing the amount of the total annual compensation for the highest-paid individual in the Dalekovod Group, which in 2023 amounted to EUR 95.560 (gross), with the average annual compensation of all employees of the Dalekovod Group excluding the highest paid employee, which in 2023 amounted to EUR 15.654.754,16 EUR (gross). Compensation for the best-paid worker and compensation for other workers consist of a basic and a variable part of the salary. The total annual fee ratio in 2023 was 0.0061.

REPORTING OF THE MANAGEMENT BOARD ON INTERNAL PROBLEMATIC ISSUES GRI 2-16

Reporting of the Management Board of the Dalekovod Group and the directors of the companies refers to reporting complaints on issues regulated by the Code of Conduct and events related to workers' rights under the Labor Act.

COMPLIANCE OF BUSINESS WITH LEGAL REGULATIONS

GRI 2-27

In 2023, there were no cases of non-compliance with legal regulations or any form of non-compliance with legal regulations in the Dalekovod Group's companies.

MEMBERSHIP IN ASSOCIATIONS

GRI 2-28

Dalekovod has been a member of the UN Global Compact since 2007, and since 2005, a member of the Community for Corporate Social Responsibility, which operates under the Croatian Chamber of Economy (HGK). Dalekovod is also a member of the American Chamber of Commerce in Croatia and the Nordic Chamber of Commerce in Croatia.

The Dalekovod Group, individual companies within the Group or our workers as natural persons are members of several associations and organizations in Croatia and abroad. Thanks to their membership in organizations and associations, our employees participate in professional conferences where they transfer, and exchange knowledge and experience related to the methods, solutions and products of the Dalekovod Group in the form of works and public presentations. Dalekovod directly helps and supports the work of associations and organizations through sponsorships and active participation in the preparation and organization of conferences held in Croatia.

Associations and organizations of which we are members:

• Croatian Exporters
• Croatian Chamber of Commerce
• Croatian Chamber of Civil Engineers
• Croatian Chamber of Electrical Engineers
• CIGRE (The International Council on Large Electric System, fr. Conseil International des Grands Réseaux Électriques)
• HO CIRED (Croatian Committee of the International Conference on Electricity Distribution)
• MIPRO (Croatian Society for Information, Communication and Electronic Technology)
• IEEE (Institute of Electrical and Electronics Engineers)
• PMI (Project Management Institute)
• Croatian Standards Institute
• HDTZ (Croatian Society for Welding Technique)
• The Croatian Society for Quality
• Croatian Employers' Association
• Croatian Chamber of Architects and Engineers in Construction
• Association for Metal and Metal Products Manufacturing
• Association for Electrical and Optical Equipment Manufacturing
• Association for Energy Renewable Energy Sources Community.
• HED (Croatian Energy Association Member of the World Energy Council umbrella association)
• Croatian Chamber of Civil Engineers
• Croatian Chamber of Electrical Engineers
• Committee for Corporate Social Responsibility at the Croatian Chamber of Commerce

INVOLVEMENT OF SHAREHOLDERS

The key shareholders of the Dalekovod Group are internal and external shareholders. Internal shareholders are workers and workers engaged in projects and manufacturing processes through agencies and subcontractors and their associations. External shareholders are customers, local communities, shareholders, investors and suppliers. The Dalekovod Group's companies often operate within consortiums that are organized for individual projects, which can consequently lead to a reduction of direct contact of the company with customers and/or the community. Therefore, key shareholders, in addition to customers, are workers, including workers' associations, suppliers and the public sector, who plays a dual role as contracting authority and regulator of operating conditions. Key shareholders of the Dalekovod Group were determined by the analysis of business processes and the associated circumstances and risks that relate to individual shareholders.

Communication with key shareholders continuously takes place in meetings, and their legitimate interests are always considered in the process of the realization of work.

Communication with numerous civil society representatives and individuals is being established within activities related to corporate social responsibility. To achieve full implementation of activities related to corporate social responsibility, communication with these shareholders takes place in various ways: through direct communication in business relations, regular meetings, special topical debates and meetings, fairs and professional conferences.

Communication with all of them takes place depending on the key issues and interests. In addition to the usual reporting system, communication takes place in other ways depending on the needs for all relevant business activities (mail newsletters, website, stock exchange reports and media reports). The main issues in the past period were related to the company's restructuring process, the impact of the COVID-19 pandemic on business, key investment projects and business results with shareholders and important contracts in Croatia and abroad.

Communication with employees takes place via e-mail, the internal social network Jenz and various notices and decisions of the company. Websites are an important means of communication with partners in the country and abroad, but also with the public in general. We use the following websites: www.dalekovod.com, www.dalekovod-proizvodnja.com and www.dalekovod-projekt.com. In accordance with marketing requirements and needs, the websites of Dalekovod d.d. and all the listed companies that comprise the Dalekovod Group are translated into English. The content of our main page www.dalekovod.com is partially available in both Norwegian and Swedish.

There is also a special internal site for employees, which contains multiple directories with documents that allow the exchange of information. Key issues arising from communication with shareholders include the future development of the company and job security, professional development of employees, meeting the growing market, environmental and regulatory standards applicable in various (especially international) markets.

Strategies, policies and business practices GRI 2-22/2-23/2-24/2-25/2-26/3-3

MANAGING THE IMPACT OF BUSINESS ON THE ECONOMY, SOCIETY, HUMAN RIGHTS AND THE ENVIRONMENT

GRI 2-22/2-23/2-24

The Dalekovod Group operates in accordance with the Companies Act, the Statute of Dalekovod d.d., the Rules of Procedure of the Supervisory Board of Dalekovod d.d., the Rules of Procedure of the Management Board of Dalekovod d.d., the Code of Conduct, the Zagreb Stock Exchange Corporate Governance Code, the Remuneration Policy, the Risk Management Policy according to the principles of ISO 310000, established and certified quality management systems, health and safety protection, environment and energy according to ISO standards and the UN Global Compact principles. The Rules of Procedure of the Supervisory Board of Dalekovod d.d., the Rules of Procedure of the Management Board of Dalekovod d.d. and the Remuneration Policy are described in the chapter Corporate Governance

STATUTE

The Statute od Dalekovod d.d. is publicly published on our website, and regulates the organization and manner of business, subject of business, share capital, the duration of the company, shares, the company organs, the business secret and disclosures of the company's data and communications

ZAGREB STOCK EXCHANGE CORPORATE GOVERNANCE CODE

The Zagreb Stock Exchange Corporate Governance Code promotes effective management and responsibilities in companies whose shares are listed on the regulated market of the Zagreb Stock Exchange, including shares of Dalekovod d.d. Once a year, Dalekovod d.d. will complete a questionnaire stating whether the company complied with each provision of the Code (compliance questionnaire) and a questionnaire providing more detailed information on corporate governance practices (governance practices questionnaire). Both questionnaires are submitted to Hanfa, and Dalekovod d.d. submitted the compliance questionnaire on time. The Code regulates the purpose and principles of management, duties of members of the Management Board and Supervisory Board, appointment of members of the Management Board and Supervisory Board and its boards, remuneration of members of the Management Board and Supervisory Board, risks, internal control and audit, disclosure and transparency, shareholders and the general assembly, inclusion and communication with shareholders and corporate social responsibility

CODE OF CONDUCT OF THE DALEKOVOD GROUP

The Code of Conduct is publicly published on our website, and it regulates the general and individual responsibilities of workers, managers' responsibilities and ethical violations. The Code also defines and regulates issues related to company assets, gifts, representation and payments, conflict of interest, crossborder business, competition practices, environmental protection and sustainability, human rights, external communication and internal communication. The reporting of internal irregularities shall be carried out in accordance with the Policy on the Procedure for Internal Reporting of Irregularities and the Appointment of a Confidential Person.

RISK MANAGEMENT POLICY

The Risk Management Policy is based on the principles of HRN ISO 31000 – Risk Management. The Policy was adopted by the Management Board and published on our website. The Management Board of Dalekovod d.d. and the Dalekovod Group's companies identify and evaluate risks that can significantly affect the business and the establishment of risk-mitigating controls. In this way, the achievement of the strategic goals of the Dalekovod Group is supported, it ensures financial stability and protection of the reputation of the Dalekovod Group and the interests of all shareholders involved in the business. Risk management is applied at different levels – strategic, operational, program and project, and activities important for business and achievement of goals.

QUALITY, ENVIRONMENTAL, ENERGY AND HEALTH AND SAFETY MANAGEMENT SYSTEMS

The Dalekovod Group's companies have implemented and certified quality, environmental, energy and health and safety management systems according to ISO standards. The field of the certification, the company to which the system and certificate refer and the date of validity of the certificate are listed on our website in the chapter Certificates and Standards..

The quality management system according to ISO 90001:2015 is described in the material topic Project Management. The chapter Health and Safety Protection contains information on the Occupational Health and Safety Management System according to ISO 45001:2018. The Energy Management System according to ISO 50001:2018 and the Environmental Management System according to ISO 14001:2015 are described within material topics in the chapter Environment.

OPERATION IN ACCORDANCE WITH THE UN GLOBAL COMPACT PRINCIPLES

Dalekovod d.d. has, as a member since 2007, committed to operate according to the principles of the UN Global Compact in the field of human rights, labor law, environmental protection and anti-corruption, and regularly reports on this in the Social Responsibility Reports

THE CONTRIBUTION OF DALEKOVOD GROUP BUSINESS OPERATIONS TO THE DEVELOPMENT OF SUSTAINABLE CROATIAN AND EU ECONOMIES

GRI 2-22/2-23/2-24

The Paris Agreement, the European Green Deal and the "Fit for 55" package define the decarbonization goals for global and EU economies, including Croatia as well. The European Green Deal sets out the objectives for almost all sectors of the economy among which the most relevant for Dalekovod Group are those that must be achieved by 2030 or 2050 in the areas of energy, transport and building. Through its business activities, i.e. technical designing, production and construction of transmission lines and substations for transmission and distribution networks in Croatia, EU Member States and in the world, Dalekovod Group provides for their modernization and increase of the management capacity for the growing number of renewable energy sources. The transmission line polls are produced by considering, among other factors, climate and weather conditions of the areas where they are installed, contributing thus to the resilience and adaptation of transmission and distribution networks to climate changes. Furthermore, Dalekovod Projekt company deals with development projects focused on renewable energy sources offering thus, in cooperation with a network of consultants, experts, companies, faculties, institutes and construction and installation producers, specialized services for windmill projects, solar power stations, biomass exploitation projects and small hydroelectric power plants. Dalekovod Projekt also provides comprehensive services of energy system modernization aimed at increasing energy efficiency. This is how Dalekovod Group contributes to the targets of the Energy Development Strategy of the Republic of Croatia until 2030 with a view to 2050, of the Integrated National Energy and Climate Plan of the Republic of Croatia and of the Climate Change Adaptation Strategy of the Republic of Croatia until 2040, with a view to 2070.

It is by technical designing, production and construction of road, highway and railway infrastructure that Dalekovod Group contributes to road transport safety, to the linking of European road and railway networks and traffic lines and the existing network of the Republic of Croatia, as well to the smooth traffic flow, which reduces traffic jams and contributes to a reduced environmental impact, especially in terms of reduction of the emission of pollutants. Modernization of railway traffic also contributes to the decarbonization of traffic in Croatia. By implementing projects in transport, Dalekovod Group contributes to the realization of the targets of the Traffic Development Strategy of the Republic of Croatia until 2030.

In order to use materials with lower environmental impact, in the analysis of new suppliers of materials and products such as concrete, insulators, metal constructions, suspension and connection equipment, electrical and electronic equipment, fuel, oil, paints and varnishes, we use questionnaires to collect information on the environmental impact of materials and products during their lifetime. Article 10 of General Terms and Conditions, which are published on our Web pages, sets out our contractors' obligation to submit information and declarations for the materials and products which have to be aligned with the EU and Croatian legislation in the area of use, classification and use of chemicals (REACH), prohibition to use certain harmful and hazardous substances for electrical and electronic equipment (RoHS), hazardous waste management and waste packaging. The contractors are also obliged to be aware of the policies of the systems of quality, environment, energy and health protection and safety at work management of Dalekovod Group, and act accordingly. By implementing such business practices, we encourage reduced use of harmful and dangerous substances in the suppliers' chain, impact the reduction of hazardous waste generation and the reduction of the amount of waste disposed of in landfills, as foreseen by the objectives of the Waste Management Plan of the Republic of Croatia.

Dalekovod Group projects mostly include interventions which require environmental impact assessment procedures and procedures of assessment of the impact on NATURA 2000 ecological network, as foreseen by the Regulation on environmental acceptability of interventions for which the documentation is drafted by authorized entities, holders of a license issued by the competent Ministry of Economy and Sustainable Development (MINGOR). Decisions on environmental acceptability of interventions or decisions on the acceptability in relation to the ecological network prescribe, if applicable, measures that must be implemented during construction preparation and the construction itself, during the use and completion of works and restoration of the environment to its original conditions. By implementing the measures referred to in the decisions in its capacity as contractor, Dalekovod contributes to the reduction of negative impact on the air and climate, waters and sea, contributing thus also to the maintenance of biological diversity.

THE CONTRIBUTION OF DALEKOVOD GROUP BUSINESS OPERATIONS TO UN SUSTAINABLE DEVELOPMENT GOALS (SDGS)

GRI 2-22/2-23/2-24

Sustainable development is a principle from the Treaty on the European Union and represents a primary objective of EU internal and external policies. The United Nations' Agenda 2030 comprises 17 sustainable development goals. The seventeen global sustainable development goals represent universal goals and the indicators that the United Nations Member States are expected to use in the development of their programs and policies by 2030. All sectors within single states should focus their policies on the achievement of these sustainable development goals. We have used a European Commission's tool, SDG Mapper, to identify the United Nations' sustainable development goals, to whose achievement Dalekovod Group also gives its contribution.

Based on the analysis, we have identified six UN sustainable development goals and targets to which Dalekovod Group directly contributes: GOAL 7: Ensure access to reliable, sustainable and modern energy at prices that are affordable to all, GOAL 8: Promote inclusive and sustainable economic growth, employment and decent work for all, GOAL 9: Build flexible infrastructure, promote inclusive and sustainable industrialization and stimulate innovation, GOAL 12: Ensure sustainable consumption and production patterns GOAL 13: Take urgent action to combat climate change and its impacts GOAL 15: Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss and GOAL 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.

We linked the UN sustainable development goals and targets with Dalekovod Group business objectives and material topics and indicators of the achievement of objectives according to the 2021 Consolidated GRI standards (ESG).

The contribution of Dalekovod Group business operations to UN sustainable development goals (UN
SDGs)

UN Sustainable				GRI Standard
Development	UN Sustainable Development	Dalekovod Group Business	Material	Indicators (ESG
Goal	Targets	Objectives	Topic	indicators)
	- 7.2 – by the end of 2030: increase the sustainability of renewable energy share in the global energy mix 8.4 – by the end of 2030:	- Business operations in line with the policies and goals defined in the framework of quality, environment, energy, risk management systems - Conducting business in	- project management - business results -our employees	GRI 3-3/201- 1/201-2/201- 3/201-4/203- 1/205-1 GRI 3-3/401-
	progressively improve global efficiency in the consumption and production of resources and endeavour to separate economic growth from nature and environment degradation, as foreseen by the 10- year framework of the programmes dealing with sustainable consumption and production, with the leading role of developed countries 8.8 – protect labour rights and promote safe working environment for all workers	accordance with Corporate Governance Code of the Zagreb Stock Exchange and Code of Conduct of Dalekovod Group - Conducting business in accordance with policies and goals defined in the framework of the quality, risk and safety at work and security management systems according to ISO standards	-health protection and safety -accountability of suppliers' chain in relation to the society and human rights	1/401-2/401- 3/403-1/403- 2/403-3/403- 4/403-5/403- 7/403-8/403- 9/404-1/404- 2/404-3/405- 1/405-2/414-1

9.1 – develop a quality, reliable, sustainable and adaptable infrastructure, including regional and transborder infrastructure, in order to support economic growth and human well-being, with a focus on cheap and equal access for all	- Conducting business in accordance with policies and goals defined in the framework of quality, environment, energy, risk and safety at work and security management systems according to ISO standards	- project management - business results	GRI 201-1/201- 2/201-3/201- 4/203-1/414-1-
12.2 – by the end of 2030: achieve sustainable management and efficient use of natural resources 12.5 – by the end of 2030: by the end of 2030: significantly reduce waste generation and increase the quantity of recycled waste	- conducting business in line with the policies and goals defined under quality, environment, energy management systems according to ISO standards – check of new suppliers in terms of management of environment, society and human rights impacts	- project management - material and raw materials - suppliers' chain accountabilit y - environment	GRI 3-3/301- 1/301-2/306- 3/306-4/306- 5/308-1
13.1 – enhance adaptability and capacity to adapt to the risks connected with climate conditions and natural disasters in all countries	- conducting business in line with the policies and goals defined under environment and energy management systems according to ISO standards - Check of new suppliers in terms of management of environment, society and human rights impacts	- project management - energy consumption - suppliers' chain accountabilit y - environment	GRI 3-3/305- 1/305-2/305- 3/305-4
15.1 – by the end of 2020: ensure preservation, renewal and sustainable use of terrestrial freshwater ecosystems and their environment, especially forests, wetland and mountains	- Conducting business in line with the policies and goals defined under environment management systems according to ISO standards - check of new suppliers in terms of management of environment, society and human rights impacts - Implementation of all measures prescribed by decisions on environmental	- project management - energy consumption - suppliers' chain accountabilit y - environment	GRI 3-3/303- 3/303-4/303- 5/304-2/308-1

	acceptability of interventions
	or by decisions on their
	acceptability in relation to
	ecological network, when
	applicable to the companies
	belonging to Dalekovod
	Group
16.5 – significant reduction of all	- Conducting business in	-business	GRI 2-7/2-16/2-
forms of corruption and bribery	accordance with the Zagreb	results -project	23/2-26/2-30
16.6 – develop efficient, responsible	Stock Exchange Corporate	management
and transparent institutions at all	Governance Code and the
levels	Code of Conduct of
	Dalekovod Group

MATERIAL TOPICS

Material topics

GRI 3-1/3-2

The determining and listing of material topics graded by internal and external stakeholders are described in the chapters Determination of material topics and List and assessment of Dalekovod Group material topics in 2023. The management of material topics has been described in each of the sustainability sectors, i.e. In the chapters entitled Economy, Society and human rights and Environment, with select indicators named in the table The contribution of Dalekovod Group operations to the UN Sustainable Development Goals (UN SDGs).

DETERMINATION OF MATERIAL TOPICS

GRI 3-1

Material topics of Dalekovod Group for 2023 remain equal to the topics established in the previous reporting period, since in the previous year, there were no significant changes in business activities, supplier structure or external factors affecting relevant areas of sustainability.

Dalekovod Group material topics were determined in accordance with guidelines for the determination of material topics described in chapter GRI 3: Material Topics in Consolidated GRI Standards from 2021. For the purpose of determining significant material topics for Dalekovod Group in 2022, a workshop was held that was attended by representatives of the Board, representatives of offices and departments controlled by the Board, representatives of sectors and departments and services within the sector of Dalekovod d.d. and representatives of the companies of Dalekovod Group included in the Report. External consultants with experience in reporting on sustainability in accordance with GRI standards were included in the material topic determination process.

In accordance with principles outlined in the Code of Ethics and the Code of Corporate Governance of the Zagreb Stock Exchange, Dalekovod Group manages impacts on the economy, society and human rights, as well as the environment, through established and certified systems according to ISO standards for quality management, environment, health and safety, energy, and business. We also manage influences via a suppliers' chain by choosing suppliers who have demonstrated business activity in accordance with sustainability principles before being included on our list. When determining the material topics, we were guided by the principles of effective risk management in accordance with HRN ISO standard 31000 - Risk Management. Dalekovod Group's risks have been divided into financial risks and business-related risks. Financial risks include insolvency risks, currency risks, interest rate risks, credit risks and risks related to technology and development. Business-related risks include market risks, risks related to changes in input

MATERIAL TOPICS

prices (raw materials, other material, work and energy), risks related to business seasonality (dependence on weather), personnel risks and IT security risks.

A total of eight material topics were selected, and the material topics were grouped together according to sustainability sectors, i.e. the impacts of Dalekovod Group's operations on the economy, society and human rights and the environment. The material topics were given grades ranging from 1 to 5. The grade of one stood for the least amount of impact, white five stood for the greatest amount of impact of the material topic on Dalekovod Group's business activity, taking into consideration financial risks and business risks.

A list of significant suppliers was compiled for the purpose of including significant external stakeholders in the process of determining and assessing material topics. A list of significant suppliers for 2023 was compiled for the purpose of including significant external stakeholders in the process of determining and assessing material topics. The stakeholders' significance was determined by taking into consideration the number of financial resources paid in accordance with signed agreements and participation in projects during the reporting period and projects related to the reporting period.

We included 24 suppliers in the assessment of material topics; these suppliers were sent questionnaires for assessing material topics on a scale from 1 to 5. At the same time, we asked the suppliers to add material topics they consider important, but which were not included in the list.

A grade of one stood for the lowest significance of a material topic to the stakeholder assessing the material topic, while a grade of five stood for the highest significance. The suppliers came from the sector of design, production and distribution of equipment for the transmission and distribution network and transformers (4 suppliers), sale and distribution of electrical materials, insulators, cables and lighting equipment (5 suppliers), maintenance and rehabilitation of transmission lines (1 supplier), rental of means of transport, machines and equipment for the construction of transmission and distribution networks and installation of transformers (4 suppliers), from the construction sector (2 suppliers), electricity provision (1 supplier), IT and telecommunications (2 suppliers), insurance (2 suppliers ), vehicle maintenance and repair (1 supplier), vehicle rental (1 supplier) and the organization of business trips (1 supplier). The assessments of the material topics were delivered by 5 out of a total of 24 suppliers i.e. 21 percent. External stakeholders did not add new material topics to those they were asked to assess.

MATERIAL TOPICS

LIST AND ASSESSMENT OF DALEKOVOD GROUP MATERIAL TOPICS IN 2023 GRI 3-2

The following table contains a list of Dalekovod Group material topics for 2022, classified in accordance with sustainability sectors – economy, society and human rights and the environment, as well as assessments by internal stakeholders i.e. Dalekovod Group employees and external stakeholders, i.e. suppliers.

Material Topics	Internal stakeholders' assessment (employees)
Economy
Project management	3,8
Business results	3,5
Society and human rights
Our employees	3,6
Health protection and safety	2,3
Impact of suppliers' chain on society and human rights	1,4
Environment
Material and raw material	3,3
Energy consumption	2,9
Environmental impact of suppliers' chain	1,8

Material Topics	External stakeholders' assessment (suppliers)
Economy
Project management	2,9
Business results	3,0
Society and human rights
Our employees	2,5
Health protection and safety	2,4
Impact of suppliers' chain on society and human rights	2,3
Environment
Material and raw material	2,2
Energy consumption	2,3
Environmental impact of suppliers' chain	2,3

2023 business performance indicators

Business performance indicators for 2023 are classified according to three sustainability sectors, i.e. the impact of Dalekovod Group's business performance on the economy, society and human rights and the environment, but also the impact of the economy, society and environment on our performance.

ECONOMY

RI 201-1/201-2/201-3/201-4/203-1/205-1/3-3

In the area of sustainability related to the economy in 2022, a total of 2 material topics have been determined - Project Management and Business Results.

GEOPOLITICAL UNCERTAINTY AND IMPACT OF PREVIOUS PANDEMIC YEARS

Dalekovod Group's business performance in 2023 took place in complicated conditions. The effects of the preceding pandemic years and geopolitical instability led to disruptions and/or temporary disruptions in suppliers' chains and to significant increases in the prices of works, goods and services, with a special focus on the increase in energy, electric energy and transport service prices. Additionally, the lack of construction workers on the domestic market is increasingly becoming a problem which could also affect the realization of the projects; however, all of the previously listed challenges are common to everyone in the Republic of Croatia.

Although the macroeconomic and political circumstances still call for caution, as potentiated by recent events in Israel, Russia's continued aggression against Ukraine as well as the slowing down of economic activities of Croatia's most significant trade partners in the EU with an announcement of a possible recession, all the markets where Dalekovod Group operates (Croatia, Sweden, Norway, Slovenia, Bosnia and Herzegovina, Macedonia, Germany and the Middle East) are seeing a growth of business activities in our business segment, with a strong investment momentum. The industry in which Dalekovod Group competes is expecting a significant conjuncture in the future period for a few key reasons: (i) a relatively old transmission network which requires renewal; (ii) shift toward renewable energy sources and a general trend of transition from the energy produced from traditional fossil fuels to electric energy produced from renewable sources; (iii) conducting tenders postponed in the previous periods due to the COVID 19 pandemic; (iv) although the challenges of the Ukraine and Near-East crisis reflect on the business process, markets have adjusted and do not have a negative effect on the business result.

Moreover, all the markets where Dalekovod Group operates (Croatia, Bosnia and Herzegovina, Macedonia, Germany, Norway, Slovenia, Sweden and the Middle East) are seeing a growth in business activities and the strong investment momentum is expected to continue.

This is why Dalekovod Group, considering its strategy of focusing on energy, railway infrastructure and equipping tunnels on roads and highways, including other opportunities, is excellently positioned for the relevant market circumstances.

A high level of capitalization and working capital, the Group's structure which enables control of all parts of the process - from design, supply and production of key components to the construction itself and the synergy achievable within the Končar Group - all of this makes it possible for this strategy to be implemented in an efficient and sustainable manner.

Dalekovod Group will continue making significant investments into its employees' health and safety as well as material conditions and increase investments into sustainable development for the purpose of achieving a balance between the environment, society and our activities to meet the requirements of development, without endangering future generations. In this regard, it must be mentioned that the projects implemented by Dalekovod Group both in energy and the area of infrastructure directly contribute to the realization of the objectives of green transition.

SUCCESSFUL COMPLETION OF FINANCIAL RESTRUCTURING AND INCREASE IN SHARE CAPITAL

On the other hand, in 2023 Dalekovod Group ended a challenging multiannual period. Dalekovod completed the process of financial restructuring via successful recapitalization and was strengthened by new capital for business development. In accordance with the stakeholders' Decision on increasing Dalekovod's share capital, 410 million kuna was paid, that is to say 41,000,000 new ordinary shares were subscribed of an individual nominal amount of EUR 1.33, increasing share capital to the amount of EUR 54,744,432.94.

The recapitalization process marks the final step in Dalekovod's recovery and is a prerequisite for long-term sustainable business operations and financial stability. With its recapitalization, Dalekovod successfully completed the pre-bankruptcy settlement and settled all creditors by carrying out a comprehensive transformation of business operations without incurring additional debt. The completed financial restructuring process ended the pre-bankruptcy settlement nine years before the initial deadline.

By implementing the capital increase and successfully finalizing the pre-bankruptcy settlements, in 2023, Dalekovod Group continued a new development stage in which it used all its experience and knowledge acquired so far as well as its successful implementation of complex projects in significantly aggravated circumstances, in combination with the undertaken restructuring of business processes and synergy effects within the Končar Group.

PROJECT MANAGAMENT

GRI 3-3/203-1/205-1

Effective project management forms the basis of Dalekovod Group's successful business operations. Projects are managed in accordance with internal procedures and are divided into energy projects and infrastructure projects. To optimize the involvement of employees who participate in the planning and

implementation of a particular project, as well as effective management of time, financial resources and mitigation of external influences such as previous pandemic years and geopolitical instability at the operational and management levels, Dalekovod Group continuously monitors all phases of each project. In the realization of projects, we manage risks in accordance with the Risk Management Policy based on the principles of standard HRN ISO 31000.

The course of the realization of projects in the energy and infrastructure sectors is monitored at weekly extended operational meetings attended by project managers and coordinators, construction engineers, assembly group managers, sales representatives, operational logistics managers and representatives of companies in charge of the design (Dalekovod project) and production of parts used for the realization of the project (Proizvodnja MK and Proizvodnja OSO).

Operational courses are held, and these courses are also attended by members of the Dalekovod Group Management Board, and operational courses that include financial information are held once a month. The monthly operational meeting including financial data can be replaced, depending on the realization of a particular project, with a quarterly meeting at which the Management Board is informed about the realization of the project with the financial results and the results of individual companies. Once a year, representatives of international branches abroad also participate in these operational courses, along with the Board. To monitor operations and realize the plans of Dalekovod Group members, weekly meetings and meetings related to cash flow management are held, attended by representatives of realization, operational logistics, procurement, treasury, Dalekovod MK and OSO and a member of the Board in charge of finance. A written report on cash flow management is submitted to the Board once in two weeks.

Other parts of Dalekovod Group, depending on their responsibilities, such as sales, corporate communications, procurement, operational logistics, human resources management, business excellence, business process improvement, legal affairs and other group members outside of core activities, inform the Board on the results according to the prescribed dynamics.

Project implementation and management processes are an integral part of the procedures within the framework of the Quality Management System according to ISO standard 9001:2015. The system relates to quality management in sales and construction activities, power lines and power plants up to 750 kV, railway infrastructure, roads, buildings, sports facilities, lighting, telecommunication lines and poles, lighting poles and halls, steel and other load-bearing structures, equipment of civil engineering works and electrical installation, suspension and connection material and provision of anti-corrosion metal protection services.

Quality Management Policy and certificate valid until 3 November, 2024, were published on our website. When implementing projects, we manage environmental impacts, the rational use of energy, and employee protection and safety in accordance with the established and certified systems according to ISO standards

described in the chapters Society and human rights and Environment. Projects are also implemented in accordance with the Code of Conduct of the Dalekovod Group and the Code of Corporate Governance of the Zagreb Stock Exchange.

2023 PROJECTS

GRI 203-1

The past year has brought Dalekovod a lot of success and major projects, confirming its position as an internationally renowned company in the field of energy. Below is an overview of only a few critical operations and moments that marked 2023.

One of the most significant is certainly the Barsebäck-Sege project in Sweden which included works on the transmission line at a length of 28 kilometers. In only 52 days and two stages, a total of 78 existing towers were removed, new foundations were built, towers were assembled and erected, and electrical installation works performed. All the old parts were carefully removed, and the terrain was restored into its original condition, focusing on environment protection and the protection of plant and animal life.

The project mobilized a hundred of Dalekovod's workers, top engineers, construction and safety-at-work experts, and fitters. This is a project which additionally reinforced the company's position both on the Scandinavian and on the European market, resulting in numerous opportunities through announced investment into modernization of the energy infrastructure.

Crossing from Sweden to Norway, where Dalekovod, as part of Statnett's reconstruction of transformer stations, participated at the beginning of the year in the reconstruction of the Hamang substation as GE Power Norway's subcontractor and carried out plant installation works. This is a 7-bay 420kV GIS substation, in the double breaker double busbar configuration. What makes it specific is the use of g3 gas (in addition to SF6 gas) in a part of the substation, which is why this substation is the first of its kind in Norway and one of the first ones in Europe that uses the more environmentally friendly g3 gas with a much lower GWP (Global Warming Potential) of 467 compared to 23,500 of the SF6 gas.

Closer to home, in Northern Macedonia, Dalekovod participated in the construction of one of the biggest solar power plants in South-Eastern Europe, with a power of 55 MW for which they carried out demanding works of engineering, supply, installation and testing of high-voltage plants and a 4.5 km long cable line.

The power plant, commissioned in late September, is the largest and first completely private power plant of the investor Mey Energy in Northern Macedonia's transmission network (MEPSO).

The work was completed in record-breaking time to the satisfaction of all the participants of this major intervention.

At home, the demanding project of construction of the OTL/cable connecting line 2x110 kV for the 110/35 kV INA RNR-TS 400 substation, for the investor INA - Industrija nafte d.d. was completed. The terrain was extremely difficult and inaccessible, and numerous new challenges appeared throughout the project which were overcome owing to the experience and joint efforts of Dalekovod's expert teams who completed the project within the given deadline.

In addition to the realized projects, the recognition for exceptional efforts in the field of safety in the energy sector also represents an achievement. This recognition was awarded to Dalekovod as part of the annual Health & Safety Summit organized by Svenska Kraftnät, held in Stockholm. This is an annual conference

organized by the Swedish national company as part of the European work environment week, focused on sustainability and safety of all actors in the energy sector.

The recognition was awarded for the first time this year, and Dalekovod received it for its impeccable management of the Grundfors ledningsåtgärder project which included the reconstruction of four existing 400 kV lines and one 220 kV line around the new substation.

Dalekovod is currently working on some twenty major projects, two of which are in Norway, five in Sweden, three in the region, one in Germany and a few in Croatia, as well as on a few minor projects. The substation segment consists of some ten projects in Croatia, Norway and Northern Macedonia.

BUSINESS RESULTS

GRI 201-1/201-2/201-3/201-4/3-3

The financial business results for 2023 are described in detail in Consolidated an Non-Consolidated Annual Report of Dalekovod Group, which has been made publicly available. This report presents data on economic indicators in accordance with the Consolidated GRI Standards from 2021.

DIRECTLY GENERATED AND DISTRIBUTED ECONOMIC VALUE

GRI 201-1

The operating revenues of Dalekovod Group in 2023 amounted to EUR 168 million and have seen a 20 percent decrease in relation to the same period during the previous year. The main contributor to the increase in the Group's income was its parent company, Dalekovod d.d. and Dalekovod OSO d.o.o.

The other companies which are the greatest contributors to the Group's income - Dalekovod Mostar d.o.o., Dalekovod Projekt d.o.o., Dalekovod MK d.o.o. and Dalekovod Ljubljana d.o.o. - achieved results in accordance with those planned.

On all the markets Dalekovod Group operates in (Croatia, Sweden, Norway, Slovenia, Bosnia and Herzegovina, Macedonia, Germany and the Middle East) our business segment shows an increase in business activities and a strong investment momentum. In these circumstances, Dalekovod Group is successfully positioned, and business progress is especially visible in tender activities and new contracts.

On 31 December 2023, the Group's Book of Contracts was worth over EUR 281 million which favorably impacted expected growth and predictability of income in the upcoming period, as well as the expected growth of business profitability.

In the reporting period, the Group's normalized EBITDA amounted to EUR 7.8 million, which is EUR 1.7 million higher than in the previous period, mostly due to increased activity and improved efficiency and business profitability of all the Group's segments, and most significantly in the parent company and Proizvodnja OSO d.o.o. Net loss after Group's discontinued operations in 2023 amounts to EUR -3.2 million, whereas net loss after discontinued operations of Dalekovod d.d. amounts to EUR -4.7 million.

The Group's negative result was impacted by the value adjustment of Dalekovod d.d. which carried out a value adjustment of the claim toward the Ministry of Finance of the Republic of Croatia from 2016 based

on the received non-final judgement from November 2023 in the court procedure P-2023/2018 by which the statement of claim of Dalekovod d.d. was rejected.

Despite the above, Dalekovod d.d. initiated the appeal procedure against the above non-final judgement, and, on 25 March 2024, received the decision of the High Commercial Court of the Republic of Croatia setting aside the judgement of the court of first instance and returned the matter to the Commercial Court in Zagreb for retrial.

Positive indicators and business recovery trends represent the basis for an optimistic look ahead.

DALEKOVOD GROUP in 000 EUR
	2022	2023
I Total revenue	140.391	169.599
Operating income	139.395	167.819
Financial income	996	1.780
II Total expenditure	138.751	171.628
Operating expenditure	137.273	170.101
– Change in production in process and final product inventories	24	-998
– Material expenses	82.475	112.817
– Personnel expenses	32.988	32.643
– Amortisation	3.979	3.451
– Other expenses	4.930	5.026
– Value adjustments	70	7.000
– Provisions	234	299
Other operating costs	12.573	9.863
Financial expenditure	1.478	1.527
III Profit or loss before taxation	1.640	-2.028
Apr Corporate tax	793	1.170
V Profit or loss of the period	847	-3.198

In accordance with its development strategy as a socially responsible company, Dalekovod d.d. Zagreb has been active for years in the fields of science and education, culture and art, sports, sustainable development and health. The company also has a significant impact on humanitarian activities. Our goal is to create a society of knowledge and to establish various perspectives for young people.

FINANCIAL CONSEQUENCES AND OTHER RISKS AND OPPORTUNITIES CAUSED BY CLIMATE CHANGE

GRI 201-2

In 2023, the Dalekovod Group conducted a climate risk and vulnerability assessment in accordance with EU taxonomy requirements for its main activity, the construction of power lines. To ensure long-term

sustainability, climate resilience, and compliance with the technical standards of the EU taxonomy, a comprehensive Climate Risk and Vulnerability Assessment (CRVA) is necessary.

The CRVA process:

Considers comprehensively how the activity is vulnerable to climate variations and changes,

Assesses related risks for the uninterrupted performance of the activity.

For high-risk cases, relevant adaptation options (structural, operational, and/or organizational) are identified to build climate resilience.

The CRVA, therefore, examines the change in the severity of risks or new risks arising from potential climate changes over the observed periods. Current weather impacts on the activity are not considered. If necessary, certain aspects of the uninterrupted performance of the activity need to be reassessed in light of the considered adaptation options, and by reassessing climate risks and vulnerabilities, an attempt should be made to evaluate whether the taxonomy-related activities, as currently designed, are robust and resilient to climate risks.

During the review of the eligibility and alignment of activities with the EU taxonomy, the Dalekovod Group identified the following activities as compliant with the criteria for significant contribution under the two currently valid environmental objectives (Climate Change Mitigation and Climate Change Adaptation) according to Annexes I and II of Commission Delegated Regulation (EU) 2021/2139:

3.1. Production of renewable energy technologies

6.15. Infrastructure for low-carbon road and public transport

These activities are described as follows:

Production of technologies for renewable energy production, where renewable energy is defined under Article 2, paragraph 1 of Directive (EU) 2018/2001, related to the construction of power lines for renewable energy sources through economic activities classified under C25, C26, and C27 according to the NACE classification. In the case of the Dalekovod Group, this activity pertains to the construction of power lines and the transmission network from the place of electricity generation to the network user and customer.

Infrastructure for low-carbon road and public transport relates to the construction, modernization, maintenance, and management of highways, streets, roads, other vehicular and pedestrian ways, surface works on streets, roads, highways, bridges, or tunnels, railway infrastructure works, including architectural and engineering services, drafting services, building inspection services, surveying services, mapping services, and similar activities, as well as conducting physical, chemical, and other analytical testing of all types of materials and products, excluding the installation of street lighting and signage. Economic activities in this category can be classified under several NACE codes, particularly F42.11, F42.13, M71.12, and M71.20.

For the aforementioned activities, a CRVA has been conducted according to the requirements of Appendix A of the Regulation to meet the "do no significant harm" (DNSH) criterion for the climate change adaptation objective, and in cases of high risk, adaptation measures have been identified.

The Dalekovod Group performs these activities in the territories of Croatia, Norway, and Sweden, and the climate sensitivity risks for these regions will be addressed.

AFTER CONDUCTING THE CRVA, IT WAS CONCLUDED THAT THE DALEKOVOD GROUP, DURING THE PERFORMANCE OF THE CONSIDERED ACTIVITIES OF BUILDING INFRASTRUCTURE FOR THE TRANSMISSION OF RENEWABLE ENERGY, WILL BE VULNERABLE TO CHRONIC AND ACUTE RISKS RELATED TO TEMPERATURE, AS WELL AS FIRES, AVALANCHES, AND LANDSLIDES.

After considering the measures for adaptation to these events, it was concluded that Dalekovod Group has been performing the same activity for a number of years, and that it has knowledge, procedures and resources prepared to minimize these impacts, and that further measures are not necessary at this moment for the observed activity.

In addition, a possible positive impact has been noticed of climate change on the extension of the season during which this activity is carried out on the territory of Scandinavia.

OBLIGATIONS FROM THE DEFINED PENSION BENEFITS AND OTHER PENSION SCHEMES GRI 201-3

The Republic of Croatia has prescribed mandatory and optional contributions for pension schemes. In accordance with the relevant national laws, these contributions are borne either by employees (where the employer does the calculation and withholds the appropriate amount from the employee's gross salary) or by companies as employers (where the employer calculates an additional amount on the gross income).

Contribution paid by employees	Contribution paid by employers
Pension Scheme - Generational Solidarity (1st pillar) – 15%	Pension Scheme – Voluntary (3rd pillar)
Pension Scheme – Personal capitalised savings (2nd pillar) – 5%

In addition to the regular mandatory payments of contributions for pension insurance, the Dalekovod Group has an organized voluntary pension fund AZ Dalekovod closed voluntary fund for the employees of the Group. The fund was established on December 2, 2004, and is managed by Allianz ZB d.o.o. company for the management of mandatory and voluntary pension funds. The pension fund is a special type of fund that does not have legal personality and was established as a voluntary pension fund for employees of Dalekovod d.d. for the purpose of investing members' funds with the aim of increasing the value and protection of the Fund's assets to ensure the payment of pension benefits to its members. The group encourages its members to invest through its subsidy of 29.30% on the monthly paid amount, (with a limit of EUR 16.19 per month), state incentives and earnings through the fund yield. Net assets of the Fund as of December 31, 2023. was EUR 3.9 million, and the number of Fund members as of December 31, 2023. was 307 members.

FINANCIAL ASSISTANCE RECEIVED FROM THE GOVERNMENT OF THE REPUBLIC OF CROATIA

GRI 201-4

In 2022, the Dalekovod Group did not receive financial aid from the Republic of Croatia.

ASSESSMENT OF THE SUSTAINABILITY OF OUR ACTIVITIES ACCORDING TO THE EU TAXONOMY

GRI 201-2

The goal of the European Union is to direct investments in sustainable activities in order to achieve the goals of the European Green Plan and achieve climate neutrality in Europe by 2050. To assess the sustainability of activities, the EU adopted Regulation 2020/852 on the establishment of a framework to facilitate sustainable investment, known also as the Taxonomy Regulation and implementing regulations setting out criteria for an assessment of activity sustainability

in accordance with six environmental objectives - climate change mitigation, adaptation of activities to climate change, the sustainable use and protection of water and marine resources, the transition to a circular economy, pollution prevention and control, and the protection and restoration of biodiversity and ecosystems. In addition to activity compliance with the six environmental objectives, compliance with the minimum safeguards related to the protection of human rights and protection at work according to the UN Guiding Principles on Business and Human Rights, including the principles and rights from the International Labor Organization's declaration on Fundamental Principles and Rights at Work and the Universal Declaration of Human Rights.

After assessing the activities according to technical criteria and complying with minimum safeguards, the activities are categorized into those listed among the implementing regulations of taxonomic activities, then to taxonomic activities aligned with technical criteria and to non-taxonomic activities for which the European Commission has not yet set out criteria for sustainability assessment. In the next step, key performance indicators are determined for each activity, i.e. fluctuation, capital expenditure (CapEx) and operating expenses (OpEx) according to the methodology prescribed in Annex I. Implementing Regulation 2021/2178 specifying the content and presentation of information concerning environmentally sustainable economic activities.

THE POTENTIAL FOR THE CONTRIBUTION OF THE ECONOMIC ACTIVITIES OF THE DALEKOVOD GROUP TO THE EU GREEN PLAN

In accordance with the obligations arising from the regulatory framework of sustainable EU finance, in the non-financial report for 2023, the Dalekovod Group assessed whether the activities performed by individual components of the group are acceptable, i.e., harmonized in relation to the EU Taxonomy. In order to contribute to the goal of the EU Green Plan and to ensure compliance with the EU regulatory framework, for this year's report, the Dalekovod Group, with the support of expert consultants, conducted a detailed analysis of each business segment, which involved various professional services from each sector, whose are detailed below.

ANALYSIS OF TAXONOMICALLY ACCEPTABLE AND COMPLIANT ACTIVITIES

The Dalekovod Group analyzed its taxonomically acceptable and harmonized economic activities following a methodology aligned with the Regulation on Taxonomy 1 and technical verification criteria 2. To meet the conditions prescribed by the Delegated Act on Disclosures 3, the Dalekovod Group first identified its taxonomically acceptable activities by examining in detail whether the descriptions of individual activities contained in the technical verification criteria match the activities that the companies perform (not only those for which they are registered). The result of this analysis, specifically the activities of the Dalekovod Group that have been identified as taxonomy-eligible and for which financial indicators for the year 2023 could be linked, is shown in the table below.

Taxonomy eligible activities of the Dalekovod Group
-----------------------------------------------------	--	--

Field	Activities (M) – mitigation of climate change (A) – adaptation to climate change	Activity name
3. Processing industry	3.1 (M)	Production of technologies for energy from renewable sources
	3.20(M)	Production, installation, and servicing of high-voltage, medium-voltage, and low-voltage electrical equipment for the transmission and distribution of electricity that significantly contribute to climate change mitigation or enable such contributions.
6. Transport	6.5 (M)	Transportation by motorcycles, cars and light commercial vehicles
	6.6 (M)	Services of road transport of goods
	6.15 (A)	Infrastructure for road and public transport
7. Construction activities	7.1 (M)	Construction of new buildings
and real estate business	7.4 (M)	Installation, maintenance, and repair of electric vehicle charging stations in buildings (and at parking spaces connected to buildings).

¹ REGULATION (EU) 2020/852 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 18 June 2020 on the establishment of a framework for facilitating sustainable investments and amending Regulation (EU) 2019/2088

² DELEGATED REGULATION OF THE COMMISSION (EU) 2021/2139 of June 4, 2021 on the amendment of Regulation (EU) 2020/852 of the European Parliament and of the Council by determining the technical verification criteria based on which it is determined under what conditions economic activity is considered to significantly contribute to mitigating climate change or adaptation to climate change and whether this economic activity causes significant damage to any other environmental goal

³ DELEGATED REGULATION OF THE COMMISSION (EU) 2021/2178 of July 6, 2021 on the amendment of Regulation (EU) 2020/852 of the European Parliament and of the Council by determining the content and presentation of information on environmentally sustainable economic ativities published by companies to which Article 19.a applies or article 29.a of the Directive 2013/34/EU and determining the methodology of mandatory publication of information

The activities were also analyzed for their contribution to the remaining four environmental objectives: sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems, for which technical criteria were published in November 2023. (4)

The following activities have been identified as eligible under these four environmental objectives:

• For the objective of Transition to a Circular Economy:
• 3.5. Use of concrete in civil engineering

For the objective of Protection and Restoration of Biodiversity and Ecosystems:

• Conservation, including restoration, of habitats, ecosystems, and species

It was challenging to separate the indicators for these activities, and they were therefore not considered in the calculations.

In the next phase, Dalekovod Group analyzed which of the taxonomically acceptable activities can be considered taxonomically compatible. The taxonomic compliance check was carried out in three steps, as prescribed by the requirements of the EU Taxonomy:

• for each taxonomically acceptable activity at the level of the Dalekovod Group, it was checked if it contributes significantly to one of the two climate goals , defined in Article 9 of the Regulation on Taxonomy,

• then was checked to see if an individual taxonomically acceptable activity meets the criterion of not causing significant damage in relation to the remaining five environmental objectives.

• Finally, compliance with minimum protective measures was checked.

The following are recognized as taxonomically harmonized activities:

• 3.20. Production, installation, and servicing of high-voltage, medium-voltage, and low-voltage electrical equipment for the transmission and distribution of electricity that significantly contribute to climate change mitigation or enable such contributions

• 6.5. Transport by motorcycles, passenger cars, and light commercial vehicles

• 6.6. Road freight transport services

• 6.15 (P). Infrastructure for road and public transport

• 7.1. Construction of new buildings.

• 7.4. Installation, maintenance, and repair of electric vehicle charging stations in buildings (and at parking spaces connected to buildings)

The following activities have been identified as taxonomy-aligned:

• 3.1. (M) Production of renewable energy technologies related to the construction of power lines for renewable energy sources through economic activities classified under C25, C26, and C27 according to the NACE classification

• 6.15. (A) Infrastructure for low-carbon road and public transport related to the construction, modernization, maintenance, and management of highways, streets, roads, other vehicular and pedestrian ways, surface works on streets, roads, highways, bridges, or tunnels, railway infrastructure works, including

architectural and engineering services, drafting services, building inspection services, surveying services, mapping services, and similar, as well as conducting physical, chemical, and other analytical testing of all types of materials and products, excluding the installation of street lighting and signage. Economic activities in this category can be classified under several NACE codes, particularly F42.11, F42.13, M71.12, and M71.20

For the mentioned activity, the technical criterion is met in which the economic activity is connected with the production of technologies for the production of energy from renewable sources. The activity also meets the DNSH criteria, for which the Dalekovod Group has created an Assessment of Climate Risks and Vulnerability to Climate Change (CRVA).

For the other recognized acceptable activities, it was concluded that the verification of all the mentioned criteria is difficult to verify, that is, within individual activities it is difficult to determine which part of the activity is potentially compliant and which is not.

The primary activity of the Dalekovod Group depends on the client's activity, and it is expected that with the increase in energy production from renewable sources, the share of complied activities of the Dalekovod Group will also increase.

Furthermore, as part of the compliance analysis, the Dalekovod Group also analyzed the current state of the minimum protective measures established in Article 18 of the Regulation on Taxonomy, which was announced in detail in the final report of the Platform for Sustainable Financing from October 2022 (6).

The Dalekovod Group operates according to the Code of Conduct, the Code of Conduct of the Dalekovod Group, the Code of Business Ethics of the Croatian Chamber of Commerce, the Code of Corporate Governance, which, among other things, contain rules and provisions on data protection, honesty in work and business, avoidance of conflicts of interest and respect for human rights. In order to manage protection and safety at work, we have implemented a system according to the ISO 45001:2018 standard.

Furthermore, when managing human resources and making important business decisions, the principles of equality and uniform criteria are respected. The Dalekovod Group operates in compliance with positive legal regulations that prohibit child labor and forced or compulsory labor. Within all companies of the Dalekovod Group and in all business activities, there is freedom of association and collective, and this also applies to business activities outside Croatia

⁴ The regulation on taxonomy defines six environmental goals (mitigation of climate change, adaptation to climate change, sustainable use and protection of water and marine resources, transition to a circular economy, prevention and control of pollution, and protection and restoration of biodiversity and ecosystems), but currently due to the lack of regulation apply technical verification criteria only for the first two (climate) objectives.

⁵ Available at https://finance.ec.europa.eu/system/files/2022-10/221011-sustainable-finance-platform-finance-report-minimumsafeguards\_en.pdf

The Dalekovod Group also conducted an analysis and review of the Dalekovod Group's requirements for compliance with the Minimum Safeguards in accordance with the SG4 Report of the Platform for Sustainable Financing. The report identifies four key topics for which compliance with minimum safeguards needs to be defined. These are:

• Human rights, including workers' rights
• Bribery/corruption
• Taxation
• Fair competition

In the aforementioned analysis, it was concluded that the Dalekovod Group meets the criteria for compliance with the Decree on Taxonomy in the area of Minimum Protective Measures and in accordance with Article 18 of the said Decree.

ACCOUNTING POLICIES AND KEY PERFORMANCE INDICATORS

After the analysis of taxonomically acceptable and harmonized activities, Dalekovod Group collected data for the calculation of key performance indicators (KPI) concerning the identified activities, namely: income, capital expenditures, and operating expenditures.

For the calculation of KPIs, the Dalekovod Group analyzed its own financial data in order to include complete and accurate data in the calculation of each KPU and to properly report on them in accordance with the Delegated Act on Publications. As prescribed, when calculating taxonomically acceptable KPIs, the Dalekovod Group took into account that an individual item can be included in only one activity, that is, they were guided by the principle of "avoidance of double counting" of the same data in different KPIs, while estimates were used described later in the text.

For this report, each KPI is expressed consolidated at the Dalekovod Group level, and an overview of qualitative information is provided for each KPU. Listed below are identified taxonomically acceptable - noncompliant activities, as well as compliant activities of the Dalekovod Group, with an overview of the calculated KPU for revenues, capital, and operating expenses for acceptable and non-compliant, compliant, and unacceptable activities, following the EU Taxonomy.

REVENUES

For the purposes of calculating KPU related to income, companies put in the ratio the net income generated from services and products related to taxonomically acceptable activities (numerator) and total net income (denominator) as determined in point 1.1.1. Annex I of the Delegated Act on Publications.

Share of taxonomy eligible/non-eligible activities in total consolidated turnover

At the level of the entire group, the analysis of the activities included in the KPI revenue numerator was carried out at the account level, and where there is insufficient analysis at the account level, individual items and basic services were taken into account through the BI reporting system

Income through taxonomically aligned activities Dalekovod Group achieved through activity 3.1. Production of technologies for energy from renewable sources, which refers to the construction of transmission lines for renewable energy sources. The share of taxonomically harmonized revenues was 0.2% (0,3 mil EUR). Activity 6.15. Road and public transport infrastructure contributes with 11% (18,5 mil EUR)

The share of taxonomically eligible income is 1.90% (HRK 19.99 million)11,2% (18,8 mil EUR).

The share of taxonomically acceptable income amounts to 5.99% (EUR 9.4 million), whereby it was determined that the activity 3.20. Production, installation and servicing of high-voltage, medium-voltage and low-voltage electrical equipment for the transmission and distribution of electricity, which significantly contribute to mitigating climate change or which enable such a contribution, contributes with 5.58% (9.4 million EUR) and 7.1, Construction of new buildings with negligible percentage.

Taxonomically unacceptable activities account for 83.21% (167.8 million EUR).

CAPITAL EXPENSES (CAPEX)

To calculate the KPI related to CapEx, the companies put the numerator and the denominator in the ratio as determined in points 1.1.2.1. and 1.1.2.2. Annex I of the Delegated Act on Publications.

Proportion of taxonomy eligible/non-eligible activities in total consolidated capex

At the level of the entire group, the analysis of the activities included in the numerator was done in cooperation with the department of maintenance, production and project management. The finance department analyzed data at the level of the entire group through a business application, through which they monitor asset movements, and thus mutual capital investments from affiliated companies were excluded. The denominator includes increases in tangible and intangible assets in 2022, before their amortization and remeasurements, including increases resulting from revaluations and impairments, for the relevant financial year and excluding changes in fair value (IAS 16 Property, plant and equipment, item 73 sub-item (e) sub-points i. and iii; IAS 38 Intangible assets, sub-point (e) sub-point IAS 40 sub-point (d) sub-points i. and iii. and the amount of the increase in long-term leases (IFRS 16 Leases, item 53, subparagraph (h)).

For the analysis of the data from 2023, a detailed approach to the matter was applied, where it was determined that there is still a need for further improvement of the process so that the data are as good as possible in future reporting periods, that is, the data on the distribution of capital costs should not be estimated.

During 2023, the most important drivers of KPU in the recognized activities were investments in passenger and cargo vehicles, and funds intended for production related to the construction of transmission lines, electrical equipment and power plants, equipment for tunnels, and the construction of new buildings.

The above-identified investments related to taxonomically acceptable activities are part of the numerator of the KPI calculation for CapEx, while the denominator consists of all investments in intangible, tangible assets, investments in real estate and assets with the right of use and refer to the increase line as shown in the notes within the financial of the Group's report.

As a result of the aforementioned investments in freight vehicles, the share of taxonomically acceptable activities amounts to 63% (2.8 million EUR), of which the largest part in capital expenditures refers to activity 6.5. Transportation by motorcycles, passenger cars and light commercial vehicles, i.e. 35.7% (1.6 million EUR).

The share of taxonomically harmonized activities in capital expenditures amounts to 20.63% (0.91 million EUR), which mainly refers to investments in equipment for performing activities 6.15. Infrastructure for road and public transport – 20.32% (0.9 million EUR).

The share of taxonomically unacceptable activities in total capital expenditures is 16.00% (0.7 million EUR).

OPERATING EXPENSES (OPEX)

To calculate the KPI related to OpEx, the companies put the numerator and the denominator in the ratio as determined in points 1.1.3.1. and 1.1.3.2. Annex I of the Delegated Act on Publications.

Proportion of taxonomy eligible/non-eligible activities in total consolidated opex

The analysis of the activities included in the numerator was carried out at the account and cost center level, and where there is no sufficient analysis at the account level, in cooperation with the maintenance department and the production department, the analysis was carried out at the supplier level. In order to avoid showing data with related companies, the analysis by accounts was performed up to the supplier level.

Similar to CapEx, a detailed approach was used, however in this case it was determined that there is a need for further improvement so that the data is as detailed as possible in the next reporting period, so that the separation of costs by activities should not be estimated. During 2023, the most important driver of KPU operational expenditures were the costs related to freight vehicles and the construction of infrastructure for road and public transport.

The above-identified operating costs related to taxonomically acceptable activities enter the numerator of the KPU calculation for OpEx, while the denominator consists of all building renovation costs, maintenance and repair costs (including cleaning costs), and short-term leases.

Operating costs related to vehicles could be accurately determined with regard to the separation of such costs, until, on the other hand, due to the impossibility of separating operating costs by activities that generate income on the basis of production, an estimate was made. In the future, the system will be adapted to classification according to taxonomic requirements as much as possible.

The share of taxonomically acceptable activities in operating expenses at the Dalekovod Group level is 51% (1.2 million EUR), of which taxonomically harmonized activities account for 9% (0.2 million EUR).

The largest part of operating costs for acceptable activities refers to activity 6.6. Goods transportation services, i.e. 29.18% (EUR 0.7 million), while the majority of operating expenses for harmonized activities refer to activity 6.15. Infrastructure for road and public transport.

The share of taxonomically unacceptable activities in operating expenses is 49% (1.2 million EUR).

Photo 4. Dalekovod Group: Share of taxonomically eligible/non-eligible activities in total revenues at the consolidated level, following Annex II. of the Delegated act on publications.

				Substantial contribution criteria				DNSH criteria ('Does not significantly harm')
Economic activities (1)	Code ( Σ) (ε)	turnover Absolute ( દ)	Proport turnover o n (t) 10	വാദങ്ങിച്ചത്. അവലംബം ടുന്നത്. ഇവലി വ (ട)	ഭജ്ഞന്തിനു തുടക്കും Climate (9) n	Water and ອງການປະ (ப)	acono Circula ਸਮ (8)	Pollution (8)	eco Biodiversity рив മാ ar	Climate n	്വാസ്ത്രിയോ stanil O ( ೭ ជ)	ุนธารณาจารพ 8 səsun (EE)	conomy Circula (1 4 )	Pollution (1 (S	(91) Əlsklənə vilsi ras	sprengales Minimum	Taxonomy- aligned proportion of turnover, year 2022	Taxonomy- aligned proportion of turnover, year 2021 (19)	(enablin 00 activity) (20)	Category Category "(transitio nal activity) (21)
		EUR	96	જુદ	હેર	જુક	96	જુન	తో	Y/N	Y/N	Y/N	Y / N	Y/N	Y/N	Y/N	దిక	తో	E	T
Taxonomy-eligible activities			%
Environmentally sustainable activities A.1. (taxonomy-aligned)
Manufacture of renewable energy 3.1 (M technologies		277.354	0,2%	100%	0%	0%	0%	0%	0%	Y	Y	Y	Y	Y	Y	Y			E
Infrastructure enabling low-carbon 6.15 (A road transport and public transport		18.524.190	11,0%										-
Turnover of environmentally sustainable activities (taxonomy-aligned) (A.1.)		18.801.544	11,2%	તેમ	તેમ	જુર	దాని	જુર	તેમ								જુદ
Taxonomy-eligible but not environmentally sustainable activities A.2. (not taxonomy-aligned activities)
Manufacture, installation, and servicing of high, medium and low voltage electrical equipment for 3.20 (N electrical transmission and distribution that result in or enable a substantial contribution to climate change mitigation		9.370.772	5,58%
7.1 (M) Construction of new buildings		2.525	0,00%
Turnover of taxonomy-eligible but not environmentally sustainable activities (not taxonomy- aligned activities) (A.2)		9.373.297	5,59%
Total (A.1. + A.2)		28.174.841	16,79%
Taxonomy non-eligible activities
Turnover of taxonomy non-eligible activities (B)		139.644.772	83,21%

Photo 5. Dalekovod Group: Share of taxonomically eligible/non-eligible activities in total capital expenditures at the consolidated level, following Annex II. of the Delegated act on publications.

							Substantial contribution criteria						DNSH criteria ('Does not significantly harm'
	Economic activities (1)	apop ( Z) (s)	urnover (8) Absolute	Proportion turnover. (t) 0	Climate ນວາງອີງເປັນມາ ແລະວັງອຸນຸແລ (김) 50	Climate uoitet-qebe ുകുമ്പല്പോ (6)	Water and ources (7) marine	MICUOS Circula (8)	Pollution (e)	nd Biodive and one manager of the program and the station of the station of the station of the station of the station of the station of the station of the station of the station of the (OT) as/ siliy au	Climate mitgation cha nge	Climate (21) noitetdebe cha U 8	reso Linces Mater marine pue ( દ દ)	Amouosa Circula (1 l r 4 )	Pollution (1 5)	pu ənibələ esco (91) stems viisu	8 sprenges Minimum p 7 )	Taxonomy- aligned 2022 (18)	Taxonomy- aligned proportion of proportion of turnover, year turnover, year 2021 (19)	Category enabling activity) (20)	Category '(transition al activity) (21)
			HRK	ల్లిక్	లో	క్కర్	శా	家	%	06	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	Y/N	తిక	%	E	T
	Taxonomy-eligible activities			ళ్ళ
A.1.	Environmentally sustainable activities (taxonomy-aligned)
3.1 (M)	Manufacture of renewable energy technologies		13.439	0,30%	100%	0%	0%	0%	0%	0%	N/A	Y	Y	Y	Y	Y	Y		N/A	E
6.15 (A)	Infrastructure enabling low-carbon road transport and public transport		897.590	20,32%	0%	100%	0%	0%	0%	0%	Y	N/A	Y	Y	Y	Y	Y
aligned (A.1.)	CapEx of environmentally sustainable activities (taxonomy-		911.029	20,63%	નેન્દ્ર	కార్లిక్	નેર	તેર	તેરૂ	లిక్								તેર
	Taxonomy-eligible but not
A.2.	environmentally sustainable activities (not taxonomy-aligned activities)
	Manufacture, installation, and
	servicing of high, medium and low
	voltage electrical equipment for
	3.20 (M) electrical transmission and		454.061	10,28%
	distribution that result in or enable a
	substantial contribution to climate
	change mitigation
6.5 (M)	Transport by motorbikes, passenger cars and light commercial vehicles		1.575.309	35,66%
6.6 (M)	Freight transport services by road		753.856	17,07%
7.1 (M)	Construction of new buildings		122	0,00%
7.4 (M)	Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings)		6.260	0,14%
	CapEx of taxonomy-eligible but not environmentally		2.789.608	63%
	sustainable activities (not taxonomy-aligned activities) (A.2)
Total (A.1. + A.2)			3.700.636	84%
	Taxonomy non-eligible activities
	CapEx of taxonomy non-eligible activities (B)		716.418	16%

Total (A + B)	4.417.054	100

Page 46

Photo 6. Dalekovod Group: Share of taxonomically eligible/non-eligible activities in total operating expenses at the consolidated level, following Annex II. of the delegated act on publications.

				Substantial contribution criteria DNSH criteria ('Does not significantly harm'
Economic activities (1)	Code ( Σ) (ε)	turnover Absolute (દ)	Proposion turnover (b) 0	Climate uoitegiitim C 3 agu (5)	Climate поітві-дві C ਡ allu (છ)	Water and sources (7) marin	sconomy Circ ein ( 8)	Pollution (e)	anskeose i və vibol və vibolunur. Bu və və bir və qalınmışdır. Bu və bir və qalınmışdır. Bu mənistan mərkəzi və bir mənistan mərkəzi və bir mənist mərkəzi və bir mənistan mərkəzi və ਹਾਸ	Climate mitigation change ( ET)	climate uoitetdep പ്പാ (乙戌) əğul	Mater opuncess (13) marine pue	comomy Circula (t) -	Pollution (1 5)	əşf edir. Əlsif olan ərə Biodiversity pue an	80 feguards (17) Minimum	Taxonomy- aligned 2022 (18)	Taxonomy- aligned proportion of proportion of turnover, year turnover, year 2021 (19)	Category activity) (20)	Category (enabling transition al activity) (21)
		HRK	ಕ್ಕಳ	8	જેવ	తో	ళ్ళా	త్రిక	96	Y/N	Y/N	Y/N	Y/N	Y / N	Y/N	Y/N	దేశ్	త్రిక	E
			ళ
Taxonomy-eligible activities Environmentally sustainable activities
A.1 (taxonomy-aligned)
Manufacture of renewable energy 3.1 (M) technologies		3.081	0%	1002%	0%	0%	0%	0%	0%	N/A	Y	Y	Y	Y	Y	Y	100%	N/A	E
Infrastructure enabling low-carbon 6.15 (A) road transport and public transport		205.795	વેન્કર	0%	100%	0%	0%	0%	0%	Y	N/A	Y	Y	Y	Y	Y
OpEx of environmentally sustainable activities (taxonomy- aligned) (A.1.)		208.877	વેન્કર	96	તેર	96	તેમ	96	96								පිරිණ
Taxonomy-eligible but not environmentally sustainable activities A.2. (not taxonomy-aligned activities)
Manufacture, installation, and servicing of high, medium and low voltage electrical equipment for 3.20 (M) electrical transmission and distribution that result in or enable a substantial contribution to climate change mitigation		104.105	4,39%															マ
Transport by motorbikes, passenger 6.5 (M) cars and light commercial vehicles		205.619	8,67%
6.6 (M) Freight transport services by road		691.920	29,18%
7.1 (M) Construction of new buildings		28	0,00%
OpEx of taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities) (A.2)		1.001.673	42%
Total (A.1. + A.2)		1.210.549	51%					Y
Taxonomy non-eligible activities
OpEx of taxonomy non-eligible activities (B)		1.161.032	49%
T-+-116 . nl		A CTA FOR	4000

Page 47

SOCIETY AND HUMAN RIGHTS

GRI 3-3/401-1/401-2/401-3/404-1/404-2/404-3/405-1/405-2

In the sector of sustainability, which relates to society and human rights in 2023, a total of 3 material topics were determined - our employees, health protection and safety and the responsibility of the suppliers' chain - society and human rights.

OUR EMPLOYEES

GRI 3-3/401-1/401-2/401-3/404-1/404-2/404-3/405-1/405-2

Basic information about the number of employees according to contract type, working hours and professional qualifications is outlined in the chapter Dalekovod Group Employees. As our employees are one of the eight material topics for 2023, in this chapter we have described human resource management practices, investments into training, transfer of knowledge and progress tracking, as well as operating in accordance with the principles of diversity and equal opportunity and parental leave.

Satisfied employees in a stimulating business environment in which their potential is recognised and directed towards the achievement of sustainable business goals are the greatest possession, but also the greatest challenge of every company, including Dalekovod Group. In determining labour relations and internal organisation, Dalekovod Group companies act in accordance with applicable regulations and collective and individual agreements and protect the human and civil rights, dignity and reputation of each employee. Any discrimination or harassment of employees based on their gender, race, religious, national or political affiliation, physical defects, age, family status, personal characteristics or beliefs is not allowed. The principle of equal pay for equal work is applied throughout the organisation. For human resources management in Dalekovod Group is responsible The Department for Human Resources Management.

Taking into account the activities of Dalekovod Group, in 2023 the share of employees in engineering positions and in positions related to production amounted to 79 percent of the total number of employees. Administrative positions in 2023 were held by 21 percent of employees. The biggest change in relation to 2022 relates to the decrease in the number of employees holding engineering and production positions, the main reason being is the structure of currently active projects and personal career development and finding a new job on the labor market or migration.

		Dalekovod	Projekt	Dalekovod	MK	Dalekovod	OSO	Dalekovod	EMU	Dalekovod	TOTAL
	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023
Administration	126	118	19	18	24	49	49	25	3	3	221	213
Enigineering and production	560	513	74	74	85	60	113	139	7	7	839	793
UKUPNO	686	631	93	92	109	109	162	164	10	10	1.060	1.006

Number of employees of Dalekovod Group in 2023/2022 per type of job performed

NEW EMPLOYEES AND EMPLOYEE FLUCTUATION

GRI 401-1

During 2023, 103 workers were newly employed in the companies of the Dalekovod Group, which is approximately equal to 2022, with 100 workers. Of the new employees, 17 percent were women, and 83 percent were men. Half of the newly employed workers, or 50.5 percent, are workers under 30. They are mostly highly educated workers and workers with specialist knowledge (electrical fitters, locksmiths, carpenters).

At the same time, in 2023, 160 employees of the Dalekovod Group quit their jobs, of which 92 percent were men and 8 percent were women, representing a 27 percent decrease in departures compared to 2022. The most employees who quit in 2023 were 81, i.e., 51 percent were in their age ranges from 30 to 50, 34 percent were under 30, and 15 percent were over 50. In 2023, the trend of workers aged 30-50 departures decreased by 24 percent compared to 2022.

	Dalekovod 2022 54 44 26 18 0 10 2 8		Dalekovod Projekt		MK	Dalekovod	OSO	Dalekovod	EMU	Dalekovod	TOTAL
		2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023
Work start		76	13	6	5	7	28	14	0	0	100	103
Men		66	10	3	4	6	16	11	0	0	73	86
<30		34	6	2	1	3	9	6	0	0	42	45
30-50		29	3	1	3	2	3	4	0	0	27	36
>50		3	1	0	0	1	4	1	0	0	5	5
Women		10	3	3	1	1	12	3	0	0	27	17
<30		5	2	1	1	0	2	1	0	0	7	7
30-50		5	1	2	0	1	6	2	0	0	15	10
>50	0	0	0	0	0	0	4	0	0	0	4	0
Work end	147	131	11	7	8	8	26	14	0	0	192	160
Men	142	122	6	3	7	8	25	14	0	0	180	147
<30	40	43	2	2	2	3	5	5	0	0	49	53
30-50	84	66	4	1	3	3	10	5	0	0	101	75
>50	18	13	0	0	2	2	10	4	0	0	30	19
Women	5	9	5	4	1	0	1	0	0	0	12	13
<30	1	2	1	0	0	0	1	0	0	0	3	2
30-50	2	3	2	3	1	0	0	0	0	0	5	6
>50	2	4	2	1	0	0	0	0	0	0	4	5

New employees and employee fluctuation 202372022

BENEFITS FOR EMPLOYEES WITH INDEFINITE-TERM CONTRACTS

GRI 401-2

In the companies of the Dalekovod Group, all workers, regardless of whether they are employed for a fixed or indefinite period of time, have the same privileges.

PARENTAL LEAVE

GRI 401-3

In 2023, a total of 24 employees of the companies Dalekovod, Dalekovod Projekt, Dalekovod OSO, Dalekovod MK and Dalekovod EMU used parental leave. Of the 24 employees using their parental leave, 10 were male and 14 were female. Of a total of 24 employees using their parental leave, 15 of them, that is to say 62 percent, returned to work in 2023. One year after returning from parental leave, 45 percent, i.e. 13 employees remained at their positions.

Final data on the employees who used parental leave will be available on 1 January 2026, i.e. at the lapse of one year and an additional year since their return to work for all employees who used parental leave in 2023.

	Dalekovod		Dalekovod Projekt		Dalekovod OSO		Dalekovod MK		EMU	Dalekovod	UKUPNO
	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023
Parental leave	11	11	3	1	6	9	1	2	1	1	20	24
Men	5	3	0	0	4	4	1	2	0	1	9	10
Women	6	8	3	1	2	5	0	0	1	0	11	14
Employees who returned from parental leave	5	6	2	0	2	6	1	2	1	1	9	15
Men	3	2	0	0	2	3	1	2	0	1	5	8
Women	2	4	2	0	0	3	0	0	1	0	4	7
Employees who have been working one year after parental leave	5	5	2	0	2	6	1	1	1	1	9	13
Men	3	1	0	0	2	3	1	1	0	1	5	6
Women	2	4	2	0	0	3	0	0	1	0	4	7

Number of employees using parental leave in 2023/2022 and their return to the workplace

TRAININGS, TRANSFER OF KNOWLEDGE AND PROGRESS MONITORING EVALUATION GRI 404-1/404-2/404-3

Dalekovod Group recognises the importance of the continuous acquisition of new knowledge and skills, as well as of the improvement of existing ones. Our employees pride themselves on a high level of knowledge and expertise and they are committed to achieving the set tasks and goals in a timely and thorough way. Our employment needs are planned on an annual basis. Throughout the process, we take into consideration the number of employees according to the type of competences they possess and we compare it to our needs for the implementation of the planned projects. Employees are hired on the basis of a selection process, and they apply to vacancies posted on employment websites, our own website, social media and via recommendations by existing employees in Croatia and abroad. We cooperate with vocational schools and universities with the aim of locating future employees with the necessary knowledge and skills. Taking into account the general employee shortage on the domestic market, we also cooperate with temporary employment agencies, also employing non-EU citizens.

In addition to specialised externally provided trainings, we also organise internally provided trainings, and in 2023 a competency development programme for management was continued, which are under direct authority of the Board (M-1 and M-2 categories). Our long-standing practice of English language learning

continued in 2023. Our employees also improve their knowledge by attending conferences, symposiums and seminars. Dalekovod Group does not log data on the number of hours of training per employee according to sex and job title; instead, it logs data on the number of employees undergoing some type of training and the overall training cost per company.

In 2023, 66 percent of the total number of Dalekovod Group employees were included in some form of externally or internally provided trainings, which, in relation to 2022 represents an increase in the number of workers involved in education by 13%..

	Dalekovod	Dalekovod Projekt	Dalekovod MK	Dalekovod OSO	Dalekovod EMU	TOTAL
Number of employees who attended trainings in 2023	549	67	18	29	5	668
Total number of employees in 2023	631	92	109	164	10	1006
Share of employees who attended trainings in 2023 /%	87	73	11	27	50	66
Training cost in 2023 / eur	101.468,51	30.325,90	9.929,14	4.289,95	400	146.413,50
Number of employees who attended trainings in 2022	507	19	4	9	0	615
Total number of employees in 2022	686	93	112	160	10	1167
Share of employees who attended trainings in 2022 /%	74	20	4	6	0	53
Training cost in 2022 / eur	81.651,12	22.974,22	7.284,34	4.418,60	0,00	116.328,28

Number of employees who attended internal or external trainings in 2022 and comparison with 2021

The total number of employees with regular review of career effects and development in Dalekovod Group was 8. All the employees hold management positions and all of them are men. Two of them are aged between 30 and 50, while the other six are over 50 years old. The implementation of performance assessment for M-1 and M-2 categories started on 1 January 2023, and the results will be reported in 2024.

DIVERSITY AND INCLUSION

GRI 405-1/405-2

In 2023, there were a total of 15 women and 171 men in management positions in Dalekovod Group companies, i.e. women held 9 percent of management positions out of a total of 186. The management level includes senior, middle and lower management. Members of the Management Board are not included in senior management, and the composition of the Management Board is presented in the Corporate Governance chapter. The ratio of the basic salary of men and women is identical in all categories of workers - management and operational level and within the operational level engineering-production and administrative positions.

The companies of Dalekovod Group employed a total of 15 workers with disabilities who are included in vulnerable groups according to Consolidated GRI Standards.

	Dalekovod		Dalekovod Projekt		Dalekovod MK		Dalekovod OSO			Dalekovod EMU
	A	B	C %	A	B	C %	A	B	C %	A	B	C %	A	B	C %
Women – management level	9	0	0%	3	0	0%	2	0	0%	1	0	0%	0	0	0%
Under 30	0	0	0%	0	0	0%	1	0	0%	0	0	0%	0	0	0%
30-50 years of age	7	0	0%	1	0	0%	1	0	0%	1	0	0%	0	0	0%
Over 50	2	0	0%	2	0	0%	0	0	0%	0	0	0%	0	0	0%
Men – operational level	116	0	0%	25	0	0%	11	0	0%	17	0	0%	2	0	0%
Under 30	2	0	0%	0	0	0%	0	0	0%	0	0	0%	0	0	0%
30-50 years of age	81	0	0%	10	0	0%	7	0	0%	9	0	0%	1	0	0%
Over 50	33	0	0%	15	0	0%	4	0	0%	8	0	0%	1	0	0%
UKUPNO	125	0	0%	28	0	0%	13	0	0%	18	0	0%	2	0	0%
Women – management level	58	3	2%	23	0	0%	3	0	0%	22	1	5%	3	0	0%
Under 30	8	0	0%	4	0	0%	1	0	0%	3	0	0%	0	0	0%
30-50 years of age	36	2	0%	12	0	0%	2	0	0%	10	0	0%	1	0	0%
Over 50	14	1	7%	7	0	0%	0	0	0%	9	1	11%	2	0	0%
Men – operational level	448	7	2%	41	0	0%	93	1	1%	124	3	2%	5	0	0%
Under 30	71	0	0%	8	0	0%	4	0	0%	18	0	0%	1	0	0%
30-50 years of age	264	2	1%	27	0	0%	50	1	2%	40	1	3%	3	0	0%
Over 50	113	5	4%	6	0	0%	39	0	0%	66	2	3%	1	0	0%
UKUPNO	506	10	2%	64	0	0%	96	1	1%	146	4	3%	8	0	0%

Number of women and men at management and operational positions

1A=total number of employees

2B=number of employees from vulnerable group of the total number of employees

³ C=number of employees from vulnerable group in the total number of employees

HEALTH PROTECTION AND SAFETY GRI 3-3/403-1/403-2/403-3/403-4/403-5/403-7/403-8/403-9

HEALTH AND SAFETY MANAGEMENT SYSTEM

GRI 3-3/403-1/403-2/403-8

Health and safety protection in the companies Dalekovod d.d., Proizvodnja MK and Proizvodnja OSO is managed according to the introduced and certified system in accordance with the ISO 45001:2018 standard, and the certificate is valid until December 1, 2025. The Dalekovod Project is certified separately according to the occupational health and safety system, and the certificate is valid until December 15, 2025. All certificates and policies are published on our website. The system policy contains objectives related to continuous improvements in health and safety protection, depending on the identified and planned risks. The system manages the risks to which employees of the Dalekovod Group and other interested parties are exposed, as well as the constant improvement of the security of all business processes. At the same time, all processes are planned, prepared and organized in accordance with the valid and applicable for the Dalekovod Group, legal and by-law regulations in the field of safety and health protection. Dalekovod d.d. also implements the "Safety Culture" campaign, which defines the rules for workers at the workplace.

Opportunities for improvement

In 2023, a total of 90 improvement measures were adopted:

• 15 measures for the Committees of affiliated companies
• 34 based on the assessment of the Management Board,
• 6 external judgments
• 16 internal controls
• 11 measures from the exercise for emergency situations.

ORGANIZATION OF BOARD FOR OCCUPATIONAL SAFETY WITHIN DALEKOVOD GROUP

GRI 3-3/403-3/403-4/403-5/403-7

Each affiliated company has its own Board for occupational safety. There are four occupational safety committees operating in the Dalekovod Group: the Dalekovod Occupational Safety Committee, the Dalekovod Project Occupational Safety Committee, the MK Production Occupational Safety Committee and the OSO Occupational Safety Committee.

Members of Board for occupational safety are: President - employer representative, Deputy President expert for occupational safety, authorized persons representing business units, employee representatives or coordinator - elected employee representatives, competent authority for occupational safety, occupational medicine physician (contracted occupational medicine institution). Board President or its deputy calls a meeting at least once every six months and defines meeting agenda depending on the current problems with regard to safety and occupational safety, with emphasis on planning and supervision of implementation of occupational safety rules. If the President fails to call a meeting in the prescribed

timeline, employee representative or representative coordinator, i.e. workers' council or union representative with rights and obligations of the workers' council has the right to call a Board meeting.

The chairman of the board in cooperation with the occupational safety expert is responsible for coordinating activities related to the organization of board meetings, the collection of input data, as well as the preparation of minutes. The minutes of the board meetings are delivered to all board members and the deadlines and persons responsible for resolution that are part of the minutes are sent to the chairman of the board for approval.

In Dalekovod, Proizvodnja MK, Proizvodnja OSO and Dalekovod Project, a total of 9 board meetings were held in 2023, in the work of which, in addition to board members, representatives of the Workers' Council, trade unions, directors of individual sectors, and members of the Management Board/directors participated in Dalekovod

Goals and activities of the Board

Goals of the Board	Activities to achieve goals
- recommend preventive activities to influence prevention of occurrence of incident situations, work processes disturbances and workplace injuries and professional illnesses in connection to work performed - recommend activities to strive to constant improvement of work conditions and advancement of occupational safety stimulate reduction of risk in all work - processes and locat - contribute to implementation of - permanent health protection of all employees plan and supervise trainings and - notifications for employees on occupational safety	- define the goals for occupational health and safety and define plans and programs for their fulfillment within the scope of implementation of legal regulations for occupational health and safety define activities to measure system efficiency - and surveillance over implementation of corrective and preventive activities adopted at occupational safety board meetings define priorities for undertaking necessary - activities improve cooperation of heads of departments - and work units for solving observed problems within the Occupational health and safety management system - recommend method for continuous improvement of work conditions, i.e. carry out preventive activities with the aim of reducing
	the risk for work related injuries and professional work related illnesses and monitor their implementation

Surveillance and communication

Bord for Occupational Safety	Surveillance and communication

Board at Dalekovod d.d.	direct surveillance over employees who work at - location Marijana Čavića 4 in Zagreb Other employees, who work on domestic and - foreign sites communicate through elected workers' commissioners with the commissioners' coordinator at the headquarters. - Given the complexity and the number of projects, employees of Dalekovod d.d. at foreign location project choose a workers' commissioner (representative) for each project
Board at Dalekovod MK and Board at Dalekovod OSO	Employees of Dalekovod MK and Dalekovod - OSO directly communicate with their representatives at location
Bord at Dalekovod Projekt	All employees are under direct Board - surveillance because work is carried out at location Marijana Čavića 4, Zagreb

INJURIES AT WORKPLACE

GRI 403-9

During 2023, there were no deaths caused by a work-related injury, nor a high-severity injury defined as an injury from which the worker cannot recover or cannot be expected to recover to the pre-injury state within 6 months of the injury occurring.

Total number of sick leave days and injuries at workplace in 2023

In 2023 sick leaves, injuries at workplace	Dalekovod	Dalekovod projekt	Proizvodnja MK	Proizvodnja OSO	Dalekovod EMU
Total number of sick leave days	7.027	772	346	3085	8
Number of deaths caused by injury at work	0	0	0	0	0
Number of serious injuries at work, excluding death	0	0	0	0	0
Number of injuries at workplace	19	0	6	3	0
Sick leave caused by an injury	9	0	5	2	0
Injuries processed in a medical institution	10	0	0	0	0
Main types of injuries at workplace	Fracture of bones		Fractures, sprains and strains	Superficial injuries

Total number of sick leave days and injuries at workplace in 2022

In 2022 sick leaves, injuries at workplace	Dalekovod	Dalekovod projekt	Proizvodnja MK	Proizvodnja OSO	Dalekovod EMU
Total number of sick leave days	6979	486	1615	2722	20
Number of deaths caused by injury at work	0	0	0	0	0
Number of serious injuries at work, excluding death	0	0	0	0	0
Number of injuries at workplace	22	0	2	1	0
Sick leave caused by an injury	8	0	2	2	0
Injuries processed in a medical institution	14	0	0	0	0
Main types of injuries at workplace	Fracture of bones		Fractures, sprains and strains	Superficial injuries

The total number of lost working hours due to work-related injuries in 2023 was 10,320, which remained at almost the same level as in 2022.

Lost work hours due to work-related injuries in 2023 and comparison with 2022.

	Dalekovod	Dalekovod Projekt	Proizvodnja MK	Proizvodnja OSO
Working hours lost due to occupational injuries in 2023	6.224	0	2.768	1.328
Working hours lost due to occupational injuries in 2022	7.393	0	368	440

THE INFLUENCE OF SUPPLY CHAIN ON COMPANY AND HUMAN RIGHTS

GRI 414-1

Dalekovod Group is aware of the potential effect suppliers have on the company and human rights. Some of our suppliers chose investors and we have no influence on those suppliers. Suppliers selected by companies within Dalekovod Group directly enter our list of suitable suppliers if they have implemented systems for quality management, environment control, energy and occupational health and safety. Suppliers who have not implemented said systems are analyzed before being listed as approved on the

basis of a questionnaire in which they deliver information on managing influence on the company and human rights. Conditions that the suppliers have to fulfill when entering into agreements with companies within Dalekovod Group and in connection with influence management on company and human rights are listed in General terms and conditions at our web site.

On the basis of completed questionnaires, each potential supplier is scored in the summary table of suppliers and compared on the basis of the achieved points with other potential suppliers.

ENVIRONMENT

GRI 3-3/301-1/301-2/302-1/302-2/302-3/302-4/303-3/303-4/303-5/304-2/305- 1/305-2/305-3/305-4/305-5/306-3/306-4/306-5/308-1

Environmental influences of Dalekovod Group are divided into influences arising from metal constructions and suspension equipment production within companies Proizvodnja MK and Proizvodnja OSO, activities of companies Dalekovod and Dalekovod Projekt and environmental influence of the supplier chain. Suppliers are those which have been selected by Dalekovod Group on the basis of set criteria and suppliers selected by investor.

Environmental influences are managed by a set and certified Environment management system in line with standard ISO 14001:2015, valid until February 25,2025., Environment management policy and certificate Dalekovod. All policies and certificates are available on our web site. Environment management policy and certificate Dalekovod d.d. i Dalekovod Projekta d.o.o., Environment management policy and certificate Proizvodnje MK d.o.o., Environment management policy and certificate Proizvodnje OSO d.o.o.

We have determined the following important environmental topics for 2023: materials and raw materials, power consumption and supply chain responsibility - environment.

MATERIALS AND RAW MATERIALS

GRI 3-3/301-1/301-2

Depiction of data in connection with materials and raw materials includes metals, alloys and chemicals used for production of metal structures and suspension and jointing equipment.

TYPES AND QUANTITIES OF MATERIALS AND RAW MATERIALS GRI 301-1

Materials used for the production of metal structures, suspension and jointing equipment are iron, zinc, aluminum and brass. Metals and alloys are procured from the Czech Republic, Italy, Poland, Spain and Turkey, and chemicals are procured from suppliers from Croatia. Life span of our products is 50 to 70 years. Dalekovod Group generates around 80% of income from foreign projects. Transmission lines and substations projects carried out abroad include products from suppliers that investor chose or from suppliers that meet quality requirements and set deadlines. Apart from the above mentioned, selected suppliers have to provide proof of managing its environmental influence, power consumption and that they have implemented occupational health and safety system.

ENERGY CONSUMPTION

GRI 302-1/302-2/302-3/302-4

The sudden price increase for power and energy sources during last few years pose as additional stimulation, along with the desire to reduce environmental influence and consumption of primary raw materials, and implement measures to increase energy efficiency for production and business processes.

ENERGY MANAGEMENT IN LINE WITH ISO 50001:2018

GRI 3-3/302-1

Companies Dalekovod and Dalekovod Projekt have implemented and certified energy management system in line with ISO 50001:2018. Energy management policy for companies Dalekovod and Dalekovod Projekt and certificate that is valid until August 8, 2024 are publicly available at our web site. The companies Dalekovod MK and Dalekovod OSO have introduced and certified separate energy management systems. Energy management policy of Dalekovod MK and certificate valid until December 28, 2024. are published on our website, as well as the Energy Management Policy of Dalekovod OSO and the certificate valid until February 28, 2024.

GOALS FOR REDUCING ENERGY CONSUMPTION IN DALEKOVOD GROUP

GRI 3-3/302-1/302-4

Within the framework of the established energy management systems in the companies of the Dalekovod Group, consumption is monitored and energy saving measures are implemented. Monitoring of energy consumption includes consumption of electric and thermal energy and petrol consumption for official vehicles and leased vehicles. Electric power is purchased from suppliers. Thermal energy is purchased partially from suppliers, and companies Dalekovod MK and Dalekovod OSO on locations in Velika Gorica produce it themselves in own boiler rooms with liquid fossil fuel as propellant.

Data on the consumption of electrical and thermal energy purchased from suppliers is based on electricity and heating bills. Data on consumption of thermal energy produced in boiler room at location in Velika Gorica are based on calculation of fuel consumption and energy efficiency of the boiler room.

Energy consumption in 2023.

Type of energy/ company	Dalekovod1	Dalekovod Projekt1	Proizvodnja MK	Proizvodnja OSO	TOTAL
Electrical energy/ MWh	460,3341		1.342,75	1.843,15	3.646,24
Thermal energy/ MWh	1.968,12		1079,59	1134,2	4.181,91
Petrol for transportation/ MWh	13.064,75	235,24	58,07	13.507,83	13.064,75
TOTAL	15.642,97		2.657,58	3.035,42	21.335,98

1Consumption of electrical and thermal energy for companies Dalekovod and Dalekovod Projekt is indicated jointly because both companies are situated at the same location

Energy consumption in 2021.

Type of energy/ company	Dalekovod1	Dalekovod Projekt1	Proizvodnja MK	Proizvodnja OSO	TOTAL
Electrical energy/ MWh	470,00		1.405,11	2.013,71	3.888,82
Thermal energy/ MWh	1.911,93		708,80	832,07	3.452,80
Petrol for transportation/ MWh	10.749,10	206,73	328,89	55,20	10.749,10
TOTAL	13.337,76		2.442,84	2.900,98	18.681,44

1Consumption of electrical and thermal energy for companies Dalekovod and Dalekovod Projekt is indicated jointly because both companies are situated at the same location.

The total energy consumption, which includes electricity and thermal energy, as well as fuel consumption for the operation of official vehicles, rental vehicles, work machines and mechanization in the Dalekovod Group, must be viewed in the context of the structure of active construction projects and the total scope of work in certain periods. In 2023, consumption will decrease by 14.21 percent compared to 2022. All companies individually reduced their total energy consumption in 2023 compared to 2022.

By comparing individual indicators of energy savings, it is evident that the total consumption of electricity in 2023 was reduced 6 percent compared to 2022, while the total consumption of thermal energy in 2023 was increased by 21 percent. Total consumption of fuel for transport increased by 19 percent which is directly connected to increase of business activities scope in 2023.

Workers who have a significant impact on energy consumption are trained for energy occupations such as central heating operators, pressure vessel operators and switchgear operators of power plants in industry. Campaigns are also carried out to increase workers' awareness of the importance of saving energy in offices when operating machines, machinery and vehicles.

ENERGY INTENSITY GRI 302-3

The energy consumption intensity was calculated based on the total energy consumed by the Dalekovod Group. Although total energy consumption increased by 14.21 percent in 2023 due to an increase in the scope of business activities and, consequently, total income by 20.80 percent, the intensity of energy consumption was lower by 5.46 percent compared to 2022. The energy intensity of the Dalekovod Group was 0.1258 MWh/1000 EUR of total revenue in 2023.

Energy intensity for Dalekovod Group in 2023 and comparison with 2022

	2023.	2022.	2023./2022 %
Energy intensity MWh/ kn	0,12580	0,133067	-5,46%
Total energy consumption/ MWh	21.335,98	18.681,44	14,21%
Profit/x1000 kn	169.599	140.391	20,80%

GREENHOUSE GAS EMISSIONS, WATER CONSUMPTION AND WASTE PRODUCTION

GRI 3-3/303-3/303-4/303-5/304-2/305-1/305-2/305-3/305-4/306-3/306-4/306- 5/308-1

Apart from material subjects regarding environment: materials and raw materials, energy consumption and supply chain responsibility, this chapter presents data on greenhouse gas emissions into air, the use of water, quantity of produced waste and the influence on biodiversity..

GREENHOUSE GAS EMISSIONS

GRI 3-3/305-1/305-2/305-3/305-4/305-5

The process of production of metal structures and suspension equipment generates larger quantities of waste, more water and more electricity is spent in comparison to office activities.

CARBON FOOTPRINT AND GREENHOUSE GAS EMISSION INTENSITY

GRI 305-1/305-2/305-3/305-4

Total greenhouse gas emissions are the sum of direct emissions originating from production processes and activities of the Dalekovod Group, i.e. Scope 1, indirect emissions originating from the production of electricity and thermal energy purchased from suppliers, i.e. Scope 2 ) and emissions originating from the supply chain, i.e. Scope 3, on which the reporting company can have a greater or lesser influence, as in the case of the Dalekovod Group.

Scope 1 includes emissions of carbon dioxide (CO2) from the process of fuel combustion in the production of thermal energy from our own boiler house at the location in Velika Gorica and emissions from fuel combustion in official vehicles, work machines and machinery. Data on fuel consumption and hours of

operation are used to calculate CO2 emissions from our own boiler rooms. CO2 emissions from vehicle fuel consumption are calculated based on data on consumption and fuel type using national factors for greenhouse gas emissions.

Scope 2 includes CO2 emissions from the production of electricity and heat purchased from suppliers based on paid bills for energy emissions and indices obtained from suppliers.

In other indirect greenhouse gas emissions - Scope 3, we insert the results of Scope 3 for suppliers and employees who use their own transport to work.

GRI 305-1/305-2/305-3/305-4

The Dalekovod Group has started calculating Scope 3 for the year 2023. We have included significant emissions of greenhouse gases from the supply chain, as well as emissions related to the arrival of employees to and from the workplace. For the initial year of the calculation of Scope 3, we started with the company Dalekovod d.d. For the coming years; we foresee an increase in the scope of calculations and the gradual inclusion of other ascending and outgoing categories of Scope 3 and an increase in the number of included companies.

Scope 3 greenhouse gas (GHG) emissions refer to emissions resulting from activities that are not under the organization's direct control but are linked to the entire value chain. These shows include:

• Upstream indirect emissions of greenhouse gases according to the GHG protocol:
• 1. Procurement of works, services and goods
• 1. Capital goods
• 1. Fuel and energy input flow (energy-related emissions not included in Scopes 1 and 2)
• 1. Inbound transportation and distribution of goods
• 1. Waste generated in business
• 1. Official trips
• 1. Arrivals of employees to work
• 1. Leased property
• Output (downstream) indirect emissions of greenhouse gases according to the GHG protocol:
• 1. Outbound transportation and product distribution
• 1. Processing of sold products
• 1. Use of sold products
• 1. End of the life cycle of sold products
• 1. Leased property

6. Franchises

7. Investments

Challenges in data collection:

• Complexity of the value chain: Identification and quantification of emissions throughout the value chain is complex due to the large number of participants and processes involved in product production, distribution, and use.

• Lack of standardized data: The data needed to calculate Scope 3 emissions are often not standardized or available. Vendors and partners may use different measurement and reporting methods, making it difficult to collect consistent data.

Incomplete or inaccurate data: Organizations often lack access to complete or accurate data on emissions outside their borders. Suppliers may not monitor their emissions or share this data with sufficient precision.

• Communication and collaboration with suppliers: Strong collaboration is required to obtain accurate emissions data. This requires open communication and trust between the organization and its suppliers, which can be challenging.

This analysis includes two key aspects that are estimated to contribute to indirect emissions significantly and represent a large part of Scope 3 itself, and thus set a reasonable basis for further calculation of other Scope 3 emissions:

• supply chain for maintenance contractors and other service providers (category one according to the GHG protocol),

• arrival of employees to work (category seven according to the GHG protocol),

The first aspect of the analysis relates to emissions with a related supply chain. Out of the 15 supplier categories that are taken into account when calculating Scope 3, significant suppliers of the Dalekovod Group are classified in category 1 - "Procurement of works, services, and goods," one of the eight so-called upstream supplier categories.

Dalekovod d.d. analyzed the emissions caused by the performance of services, the transportation of materials and equipment from the supplier to the place of work, and the emissions created during the preparation of some of the materials and the work itself.

To collect data on the impacts of the supply chain on the environment, a questionnaire was drawn up according to the Consolidated version of the GRI standard from 2021, which contained questions about emissions and the intensity of greenhouse gases. The questionnaire was sent by e-mail to 28 important suppliers, and the importance of the suppliers was determined based on the contracted financial resources paid for services, goods, and works, as well as cooperation on important projects. The goal was to select the largest supplier with which 80% of the turnover is achieved.

This analysis allows one to understand and manage the supplier's impact on the company's overall carbon footprint and identify opportunities to reduce emissions in the future.

Out of 28 suppliers' data on greenhouse gas emissions per unit of revenue, 11 completed questionnaires were submitted.

Scope 3 emissions from this category, i.e., emissions produced by suppliers during the performance of services and works, amounted to 568 t CO2e for the collected suppliers.

The second aspect includes emissions created when employees arrive at the workplace. For this purpose, the Dalekovod Group conducted a survey among employees to collect data on the modes of transportation they use, the distances they travel, and the average emissions of different types of transportation. The analysis included transport by car, public transport, bicycle, and walking. The data collected enabled a precise calculation of emissions, critical to identifying opportunities to encourage more sustainable ways of getting to work, such as using public transport, cycling, or ride-sharing.

Out of 457 employees of Dalekovod d.d. who come to work with their own transport, 212 of them filled out the questionnaire, representing 46% of respondents.

The picture below shows the distribution of methods of arrival of employees of Dalekovod d.d. to work and the structure of means of transport.

Emissions from Scope 3, which refer to the arrivals of employees of Dalekovod d.d. per workplace for the part of the employees who filled out the questionnaire amounts to 126.51t CO2e.

The Dalekovod Group's carbon footprint in 2023 was 5,542.07 tons of CO2, or 13.06 percent higher than in 2022, when it was 4,902.01 tons. The increase in CO2 emissions is directly related to the increase in the scope of business activities, which is also evident from the increased income in 2023.

Carbon footprint in 2023.

	Dalekovod	Dalekovod Projekt1	Proizvodnja MK	Proizvodnja OSO	TOTAL
Direct emissions - Scope 1/ t	3.671,20	42,09	389,98	356,58	4.459,85
Indirect emissions - Scope 2/ t	708,57	0	155,58	218,07	1.082,22
TOTAL	4.379,77	42,09	545,56	574,65	5.542,07

Carbon footprint in 2022

	Dalekovod	Dalekovod Projekt1	Dalekovod MK	Dalekovod OSO	TOTAL
Direct emissions - Scope 1/ t	3.020,50	58,09	305,07	265,13	3.648,79
Indirect emissions - Scope 2/ t	709,63	0	223.41	320,18	1.253,22
TOTAL	3.730,13	58,09	528,48	585,31	4.902,01

The intensity of greenhouse gas emissions was 0.03268 t CO2/1000 eur of total income in 2023, i.e. 32.68 g CO2/eur. In 2022, the intensity of emissions was 34.92 g CO2/eur of total income, that is, the intensity of emissions was reduced by 6.41 percent in 2023.

Emission intensity for greenhouse gas in 2023 and comparison with 2022

	2022	2021	2022/2021 %
Emission intensity tCO2/kn	0,03268	0,03492	-6,41%
Carbon footprint in 2022 /t	5.542,07	4.902,01	13,06%
Profit/x1000 kn	169.599	140.391	20,80%

WATER

GRI 303-3/303-2/303-3/303-4/303-5

The water used in Dalekovod Group companies originates from the public water supply system. Water consumption in Dalekovod MK and Dalekovod OSO in Velika Gorica is monitored according to purpose sanitary, technological, cooling water, and water in recirculation. More than 65 percent of consumed water refers to sanitary water consumption. Rainwater is purified on an oil-water separator before being poured into the public drainage system. Water consumption is regularly measured with the help of a water meter. In the case of water consumption exceeding the set limits, the cause of the increase in consumption is determined, and measures are taken to eliminate the deviation.

At the location of the Dalekovod Group headquarters in Zagreb, sanitary, technological, and stormwater wastewater is discharged. The discharge of wastewater at the headquarters of the Dalekovod Group and at the location of Dalekovoda MK and Dalekovoda OSO in Velika Gorica is regulated by water permits. In the last four years, the limit values of water emissions (GVE) prescribed by water permits have not been exceeded. An accredited laboratory performs wastewater quality tests and compliance with the conditions of water permits. The water from the kitchens in Zagreb and Velika Gorica locations is purified through oil wells, and stormwater is discharged into the public drainage system through separators.

On construction projects, special attention is paid to the execution of works near sources of drinking water, wetlands, rivers, and water courses to eliminate negative impacts.

	Dalekovod	Dalekovod Projekt1	Dalekovod MK	Dalekovod OSO	TOTAL
Total water consumption in 2023/m3		4.855,00	3.380,97	7.289,01	15.524,98
Total water consumption in 2022/m3		3.362,00	1.862,76	4.407,24	9.632,00
2022/2021 %		44%	82%	65%	61%

Water consumption in 2022 and comparison with 2021

1 Consumption of water for companies Dalekovod and Dalekovod Projekt is indicated jointly because both companies are situated at the same location.

WASTE PRODUCTION

GRI 306-1/306-2/306-3/306-4/306-5

The amount of produced waste is monitored through the Environmental Management System according to the ISO 14001:2015 standard, within which reduction targets are set. The chosen indicator for waste is the total amount of produced waste and the amount of produced hazardous and non-hazardous waste. Data on the amount of waste was obtained based on the weighing of waste, which is carried out by an authorized waste management company, and information on this is provided to the companies of the Dalekovod Group. The most significant waste produced in Dalekovod in 2023 are municipal waste, different types of packaging waste (plastic, wood, and packaging contaminated with dangerous substances), and waste tires. The waste generated in the offices of the Dalekovod Project is equal to household waste, and the most significant part of the produced waste is mixed municipal and waste paper, as well as paper and cardboard packaging. Most waste produced in Dalekovod MK and Dalekovod OSO is shavings and sawdust from metal processing and foundry sand. In Dalekovod OSO, the largest share of produced hazardous waste is emulsions for metal processing.

The waste generated in the companies of the Dalekovod Group is categorized by the Waste Catalog prescribed by the Ordinance on Waste Management and is separated at the place of origin according to type and temporarily stored until it is handed over to authorized companies with a valid permit for waste management activities or entry in the appropriate register. A record is kept for each type of waste. Along with handing over the waste, the accompanying waste sheet (PL-O) is handed over to the authorized companies, except for mixed municipal waste with the critical number 20 03 01.

The waste generated by the performance of Dalekovod's activities outside Croatia is managed by the legal regulations of the country where it operates.

In 2023, the Dalekovod Group produced 101.47 tons of hazardous and 869.11 tons of non-hazardous waste. 79.69 tons were deposited in landfills, and 890.89 tons of produced waste were recovered. The total production of hazardous waste in 2023 increased by 250 percent and non-hazardous waste by 70 percent, which is related to relocating the Dugo Selo regional base.

The Dalekovod Group companies reported data on the produced waste to the electronic database Register of Environmental Pollution (ROO) managed by MINGOR because the amount of produced hazardous waste was greater than 500 kg, and non-hazardous waste was greater than 20 t.

	Daleko	Dalekovod	Dalekovod	Dalekovod
	vod	Projekt	MK	OSO	TOTAL
Produced hazardous waste/ t	19,12		64,96	17,39	101,47
Produced non-hazardous waste/ t	413,09		241,65	214,37	869,11
Total waste/ t	432,21		306,61	231,76	970,58
Recycled waste (R)/ t	368,70		306,61	215,57	890,89
Waste disposed on landfill sites (D)/ t	63,50		0	16,19	79,69

Production and waste management options in 2023

Production and waste management options in 2022

	Dalekovod	Dalekovo	Dalekovod	Dalekovod	TOTAL
		d Projekt	MK	OSO
Produced hazardous waste/ t	12,91		1,84	14,26	29,01
Produced non-hazardous waste/ t	60,65		257,88	191,27	509,80
Total waste/ t	73,57		259,72	205,57	538.86
Recycled waste (R)/ t	73,57		259,72	188,94	522,23
Waste disposed on landfill sites (D)/ t	0		0	11,56	11,56

BIODIVERSITY PROTECTION

GRI 304-1/304-2

Impacts on biological diversity are managed through procedures for assessing the effects of interventions on the environment and the NATURA 2000 ecological network according to the Regulation on the Assessment of Environmental Impacts of Interventions (Regulation) provisions. The decision on the acceptability of interventions on the environment and the ecological network is a condition for obtaining a location permit for those interventions listed in the Annexes to the Regulation. Decisions are issued by the competent Ministry of Economy and Sustainable Development (MINGOR). The public participates in the procedures for assessing the impact of interventions on the environment and the ecological network, and

the decisions are published publicly on the website of MINGOR or the county body responsible for environmental protection. Most of the projects in the field of energy and infrastructure carried out by the companies of the Dalekovod Group and our suppliers are on the list of interventions from the Regulation, and investors obtained the Solutions. The decisions prescribe the measures that must be implemented during the preparation of construction, construction and after the cessation of operation or use of facilities and infrastructure, as well as the restoration of the environment to its original state. Companies of the Dalekovod Group comply with all prescribed measures when applicable to us, and by choosing suppliers who manage environmental impacts, we also influence the reduction of the ecological impact of the supply chain. Activities of Dalekovod d.d. that take place outside of Croatia are carried out by national legal regulations to protect all environmental components. Dalekovod Group companies in Croatia are not located in protected areas or near protected areas (national protection categories, NATURA 2000, UNESCO). During 2023, Dalekovod d.d. performed transmission line construction activities in NATURA 2000 areas, in one nature park in Croatia and one in Sweden.

IMPACT OF SUPPLY CHAIN ON THE ENVIRONMENT

GRI 308-1

The Dalekovod Group is aware of the potential impact of suppliers on the environment. Investors choose some of our suppliers, and we do not influence them. Suppliers selected by the companies of the Dalekovod Group are directly included in our list of acceptable suppliers if they have environmental, energy, and health and safety management systems in place. Suppliers who do not have the listed systems in place are analyzed before inclusion on the list based on a questionnaire in which they provide information on environmental impact management. The conditions suppliers must fulfill regarding managing environmental impacts when concluding contracts with companies of the Dalekovod Group are specified in the General Terms and Conditions of Business published on our website.

Based on completed questionnaires, each potential supplier is scored in the summary table of suppliers and compared based on the achieved points with other potential suppliers.

In addition, in 2023, Grupa Dalekovod started measuring its suppliers' environmental impact through scope 3 calculations. Of the 28 invited key suppliers, selected based on 80% of the turnover with suppliers, 12 suppliers responded to the questionnaire. The results and a more detailed analysis can be found in the chapter Carbon footprint and intensity of greenhouse gas emissions.

GRI CONTENT INDEX

Statement of	The Dalekovod Group has published information according to GRI indicators in the 2023 Business and Sustainability Report.
Use		The reporting period is from January 1 to December 31, 2023.
GRI 1	GRI 1: the basics of 2021
IT'S A STANDARD	indicator	ESRS Request	page number
GRI 2: General Announcement s 2021	2-1 Information about the organization	In accordance with Accounting Directive 2013/34/EU	2
	2-2 Entities included in the organization's sustainability report	ESRS 1 5.1; ESRS 2 BP-1 §5 (a) and (b)	3
	2-3 Reporting period, frequency of reporting and contact	ESRS 1 §73	3
	2-4 Republications of information	ESRS 2 BP-2 §13, §14 (a) to (b)	3
	2-5 Exterior Inspection	Compliant with third-party assurance requirements of the Corporate Sustainability Reporting Directive (EU) 2022/2464	3
	2-6 Activities, Value Chain and Other Business Relationships	ESRS 2 SBM-1 §40 (a) i to (a) ii, (b) to (c), §42 (c)	4,6
	2-7 Workers	ESRS 2 SBM-1 §40 (a) iii; ESRS S1 S1-6 §50 (a) - (b) te (d) - (e), §51 to §52	7
	2-8 Workers who are not employees of the organization	ESRS S1 S1-7 §55 - §56	7
	2-9 Composition of the management structure	ESRS 2 GOV-1 §21, §22(a), §23; ESRS G1 §5 (b)	11
	2-10 Appointment and election of the highest governing body	The topic is not covered by the list of sustainability factors in ESRS 1 AR §16	12
	2-11 Chairman of the highest governing body	The topic is not covered by the list of sustainability factors in ESRS 1 AR §16	12
	2-12 The Role of the Top Management Authority in Overseeing Impact Management	ESRS 2 GOV-1 §22(c); GOV-2 §26 (a) - (b); SBM-2 §45(d); ESRS G1 §5(a)	13

2-13 Delegating Responsibility for Impact Management	ESRS 2 GOV-1 §22 (c) i; GOV-2 §26 (a); ESRS G1 G1-3 §18 (c)	13
2-14 The Role of the Supreme Governing Body in Sustainability Reporting	ESRS 2 GOV-5 §36; IRO-1 §53 (d)	13
2-15 Conflict of interest	The topic is not covered by the list of sustainability factors in ESRS 1 AR §16	11
2-16 Communication of Issues of Special Concern	ESRS 2 GOV-2 §26(a); ESRS G1 G1-1 AR 1 (a); G1-3 §18 (c)	14
2-17 Collective knowledge of the highest governing body	ESRS 2 GOV-1 §23	13
2-18 Impact assessment of the highest managing authority	The topic is not covered by the list of sustainability factors in ESRS 1 AR §16	13
2-19 Reward Policies	ESRS 2 GOV-3 §29 (a) - (c); ESRS E1 §13	13
2-20 Fee Determination Process	ESRS 2 GOV-3 §29 (e)	13
2-21 Total annual fee ratio	ESRS S1 S1-16 §97 (b) to (c)	13
2-22 Sustainable Development Strategy Statement	ESRS 2 SBM-1 §40 (g)	19,20
2-23 Corporate Policy Obligations	ESRS 2 GOV-4; MDR-P §65 (b) - (c), (f); ESRS S1 S1-1 §19 - §21, §AR 14; ESRS S2 S2-1 §16 - §17, §19, §AR 16; ESRS S3 S3-1 §14, §16 - §17, §AR 11; ESRS S4 S4-1 §15- §17, §AR 13; ESRS G1 G1-1 §, §AR 1 (b)	19,20
2-24 Embedding Corporate Policy Commitments	ESRS 2 GOV-2 §26(b); MDR-P §65(c); ESRS S1 S1-4 §AR 35; ESRS S2 S2-4 §AR 30; ESRS S3 S3-4 §AR 27; ESRS S4 S4-4 §AR 27; ESRS G1 G1-1 §9, §10 (g)	19,20

	2-25 Processes of remediation of negative impacts	ESRS S1 S1-1 §20(c); S1-3 §32 (a), (b), (e), §AR 31; ESRS S2 S2-1 §17 (c); S2-3 §27 (a), (b), (e), §AR 26; S2-4 §33(c); ESRS S3 S3-1 §16(c); S3-3 §27 (a), (b), (e), §AR 23; S3-4 §33(c); ESRS S4 S4-1 §16(c); S4-3 §25 (a), (b), (e), §AR 23; S4-4 §32 (c)	17
	2-26 Mechanisms for seeking advice and raising concerns	ESRS S1 S1-3 §AR 32 (d); ESRS S2 S2-3 §AR 27 (d); ESRS S3 S3-3 §AR 24 (d); ESRS S4 S4-3 §AR 24 (d); ESRS G1 G1-1 §10 (a); G1-3 §18(a)	17
	2-27 Compliance with laws and regulations	ESRS 2 SMB-3 §48(d); ESRS E2 E2-4 §AR 25 (b); ESRS S1 S1-17 §103(c)- (d), §104(b); ESRS G1 G1-4 §24 (a)	14
	2-28 Membership in associations	G1 ESRS 1 §AR 16. MDR-P, MDR-A, MDR-T, and/or as an entity-specific metric to be reported under ESRS 1 §11 and in accordance with MDR-M	15
	2-29 Approach to stakeholder involvement	ESRS 2 SMB-2 §45 (a) i - (a) iv; ESRS S1 S1-1 §20 (b); S1-2 §25, §27 €, §28; ESRS S2 S2-1 §17 (b); S2-2 §20, §22 €, §23; ESRS S3 S3-1 §16 (b); S3-2 §19, §21(d), §22; ESRS S4 S4-1 §16 (b); S4-2 §18, §20 (d), §21	15
	2-30 Collective agreements	ESRS S1 S1-8 §60 (a), §61	9
	3-1 The process of determining material topics	ESRS 2 BP-1 §AR 1 (a); IRO-1 §53 (b) ii - (b) iv	22
	3-2 List of material topics	ESRS 2 SBM-3 §48 (a), (g)	26
GRI 3: Material topics 2021	3-3 Management of material topics	ESRS 2 SBM-1§ 40(e); SBM-3 §48 (c) i, (c) iv; MDR-P, MDRA, MDR-M, MDR-T; ESRS S1 S1-2 §27; S1-4 §39, AR 40(a); S1-5 §47 (b) - (c); ESRS S2 S2-2 §22; S2-4 §33, §AR 33, §AR 36(a); S2-5 §42 (b) - (c); ESRS S3 S3- 2 §21; S3-4 §33, §AR 31, §AR 34(a); S3-5 §42 (b) - (c); ESRS S4 S4-2 §20, S4-4 §31, §AR 30, §AR 33 (a); S4-5 §41 (b) - (c)	28

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GRI 201: Economic indicators of business 2016	201-1 Direct economic value generated and distributed	The topic is not covered by the list of sustainability factors in ESRS 1 AR §16	29
	201-2 Financial Consequences and Other Risks and Opportunities of Climate Change	ESRS 2 SBM-3 §48 (a), (d) - (e); ESRS E1 §18; E1-3 §26; E1-9 §64	30,31
	201-3 Defined Benefit Plan Liabilities for Retirement and Other Retirement Plans	The topic is not covered by the list of sustainability factors in ESRS 1 AR	30
	201-4 Financial assistance received from the government	§16	31
GRI 203: Indirect Economic Impacts 2016	203-1 Supported investments in infrastructure and services	S3 ESRS 1 §AR 16. MDR-P, MDR-A, MDR-T, and/or as an entity-specific metric to be reported under ESRS 1 §11 and in accordance with MDR-M	29
GRI 205: Anti corruption 2016	205-1 Corruption Risk Assessment Activities	ESRS G1 G1-3 §AR 5	28
GRI 303: Water 2018	303-3 Water abstraction	E3 ESRS 1 §AR 16. MDR-P, MDR-A, MDR-T, and/or as an entity-specific metric to be reported under ESRS 1 §11 and in accordance with MDR-M	57
	303-4 Wastewater	E3 ESRS 1 §AR 16. MDR-P, MDR-A, MDR-T, and/or as an entity-specific metric to be reported under ESRS 1 §11 and in accordance with MDR-M	57
	303-5 Water consumption	ESRS E3 E3-4 §28 (a), (b), (d), (e)	57
GRI 304: Biodiversity 2016	304-1 Jobs owned, rented, operated in or near protected areas and areas of high biodiversity value outside protected areas	ESRS E4 §16 (a) i; §19 (a); E4-5 §35	59
	304-2 Significant Impacts of Activities, Products, and Services on Biodiversity	ESRS E4 E4-5 §35, §38, §39, §40 (a), (c)	59

GRI 305: Emissions 2016	305-1 Direct greenhouse gas emissions – Scope 1	ESRS E1 E1-4 §34(c); E1-6 §44(a); §46; §50; §AR 25(b), (c); §AR 39 (a) - (d); §AR 40; AR §43 (c) - (d)	56
	305-2 Indirect greenhouse gas emissions associated with energy consumption — Scope 2	ESRS E1 E1-4 §34(c); E1-6 §44(b); §46; §49; §50; §AR 25(b), (c); §AR 39 (a) - (d); §AR 40; §AR 45 (a), (c), (d), (f)	56
	305-3 Other greenhouse gas emissions – Scope 2	ESRS E1 E1-4 §34(c); E1-6 §44(c); §51; §AR 25(b), (c); §AR 39 (a) - (d); §AR 46 (a) (i) - (k)	56
	305 -4 Greenhouse gas emission intensity	ESRS E1 E1-6 §53; §54; §AR 39(c); §AR 53 (a)	56
GRI 306: Waste	306-1 Generation of waste and significant impacts associated with waste	ESRS 2 SBM-3 §48 (a), (c) ii, iv; ESRS E5 E5-4 §30	58
	306-2 Management of Significant Impacts Related to Waste	ESRS E5 E5-2 §17, §20 €, (f); E5-5 §40, §AR 33 ©	58
2020	306-3 Waste generated	ESRS E5 E5-5 §37 (a), §38 - §40	58
	306-4 Waste diverted from landfill	ESRS E5 E5-5 §37 (b), §38 - §40	58
	306-5 Disposal-directed waste	ESRS E5 E5-5 §37 (c), §38 - §40	58
GRI 308: Supply Chain Environmental Impact Assessment 2016	308-1 New suppliers inspected according to ecological criteria	ESRS G1 G1-2 §15 (b)	60
GRI 401: Employees 2016	401-1 Hiring of new employees and employee turnover	ESRS S1 S1-6 §50 (c)	43
	401-2 Benefits Provided to Full Time Employees That Are Not Provided to Fixed-Term or Part Time Employees	ESRS S1 S1-11 §74; §75; §AR 75	44
	401-3 Parental leave	ESRS S1 S1-15 §93	44

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GRI 403: health and safety	403-1 Occupational Health and Safety Management System	ESRS S1 S1-1 §23	47
	403-2 Hazard Identification, Risk Assessment, and Incident Investigation	ESRS S1 S1-3 §32 (b), §33	47
	403-3 Occupational Health Services		48
	403-4 Worker participation, consultation and communication on health and safety at work	S1 ESRS 1 §AR 16. MDR-P, MDR-A, MDR-T, and/or as an entity-specific metric to be reported under ESRS 1 §11 and in accordance with MDR-M	48
2018	403-5 Training of workers on occupational health and safety		48
	403-7 Prevention and mitigation of occupational health and safety impacts directly related to business relationships	ESRS S2 S2-4 §32(a)	50
	403-9 Injuries at work	ESRS S1 S1-4, §38(a); S1-14 §88(b), (c); §AR 82	45
GRI 404: Training and Education 2016	404-1 Average number of hours of annual training per employee	ESRS S1 S1-13 §83(b), §84	45
	404-2 Employee Upskilling Programs and Transition Assistance Programs	ESRS S1 S1-1 §AR 17 (h)	45
	404-3 Percentage of Employees Receiving Regular Performance and Career Development Evaluations	ESRS S1 S1-13 §83 (a), §84	46
GRI 405: Diversity and	405-1 Diversity of management bodies and employees	ESRS 2 GOV-1 §21(d); ESRS S1 S1-6 §50(a); S1-9 §66 (a) - (b); S1-12 §79	46
Equal Opportunities 2016	405-2 Ratio of basic salary to income of women and men	ESRS S1 S1-16 §97, §98	46
GRI 414: Assessment of the Impact of the Supply Chain on Society 2016	414-1 New suppliers reviewed according to social criteria	ESRS G1 G1-2 §15 (b)	51

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COMPANY INFORMATION

Company information

Dalekovod Joint Stock Company for engineering, production and construction Marijana Čavića 4, 10 000 Zagreb, Croatia 10001 Zagreb, P.P. 128

URL: www.dalekovod.hr , www.dalekovod.com / e-mail: dalekovod@dalekovod.hr Subscribed capital: HRK 412,471,930.00 / EUR 54,744,432.94 (fixed conversion rate 7.53450) The amount of share capital is presented in euros for information purposes and does not affect the rights and obligations of the company or its members. Number of shares: 41,247,193

VAT reg.no.: 47911242222 / Corporate ref.no.: 080010093, Trgovački sud u Zagrebu / Taxpayers no.: 3275531

Activity code: 4222 (Construction of electricity and telecommunication lines)