Dalekovod d.d. — Management Reports 2013

Feb 19, 2013

Dalekovod d.d. Marijana Čavića 4 10 000 Zagreb

Management Report for Jan-Dec 2012

* IMPORTANT NOTE TO THE MANAGEMENT REPORT:

The financial statements within the Management Report represent preliminary, unaudited, consolidated statements. There may be certain inconsistencies between the preliminary and final audited financial statements of the Group, which will not significantly affect Group's business results.

The annual audited financial statements for the Group will be published as required by law, by 30 April 2013.

Unaudited, consolidated

Zagreb, 14 February 2013

TABLE OF CONTENTS:

• $\mathbf{L}$ MANAGEMENT REPORT
• $\mathbf{II}$ . DECLARATION
• $III.$ BALANCE SHEET
• IV. COMPREHENSIVE INCOME STATEMENT
• CASH FLOW STATEMENT V.
• STATEMENT OF CHANGES IN EQUITY $VI.$
• VII. NOTES TO FINANCIAL STATEMENTS

palekovop

I. MANAGEMENT REPORT

Below is an overview of the annual business activities and a presentation of the unaudited financial statements for Dalekovod Group (hereinafter referred to as the "Group") and for Dalekovod d.d. (hereinafter referred to as "DALEKOVOD"). Unless otherwise indicated, all information is stated in HRK.

Key financial indicators for DALEKOVOD Group in Q4 2012:

• $\blacktriangleright$ Total revenues of HRK 1,255 million
• +7.9% compared to the same period last year
• Los before interest, taxes, depreciation and amortization (EBITDA) of HRK 222.777 million $\blacktriangleright$ Considering the continued negative economic trends, DALEKOVOD had a negative EBITDA margin in 2012
• Loss before interest and taxes (EBIT) of HRK 273.267 million $\triangleright$ As a result of negative economic trends, DALEKOVOD had a negative EBIT
• Net loss after minority interests of HRK 350.084 million $\triangleright$
• A loss of HRK 278,337 million was recorded in the same period last year
• Decrease in Group's total financial debt by HRK 67 million $\triangleright$
• 8.0% compared to the same period last year (except for Sky Office project financing).

DALEKOVOD Group's sales revenue in 2012 totaled HRK 1,255 million, which is 7.9% more than the same period last year. DALEKOVOD's sales revenue generated during the same period totaled HRK 887.8 million, which is 15% less than the same period last year. Such decrease in revenue for DALEKOVOD was caused by the fact that the Production segment was an integral part of DALEKOVOD in 2011. The Group had a negative EBITDA of HRK 222.8 million. The Group incurred a total net loss of HRK 350.1 million, while DALEKOVOD incurred a total net loss of HRK 383.1 million in the same period.

The negative net operating result for DALEKOVOD and the Group recorded in 2012 is mostly a result of value adjustments of assets and adjustments in accounts receivable made by DALEKOVOD as of 30.09.2012 and extensions in performance of Group's present contracts.

$\blacktriangleright$

The most significant factors relative to the negative net result include:

Value adjustment in accounts receivable and value adjustment of other assets

A pre-bankruptcy proceeding was brought against DALEKOVOD on 20 December 2012; to present as realistic a situation as possible and a new clean start. DALEKOVOD adjusted the values of different asset items. The negative effect of one-time write-offs was HRK 329.6 million.

Extension of performance at present construction sites $\blacktriangleright$

A significant effect on DALEKOVOD's business is reflected in the road building segment where substantial extensions were recorded as a result of economic difficulties suffered by consortium partners, especially Konstruktor d.d. As regards its international markets, DALEKOVOD faced a project extension on the Ukrainian market in 2012, but the project continued with its expected intensity in 2013.

Significant pressure of financial expenses on DALEKOVOD's business $\blacktriangleright$

As a result of a high level of financial costs (6.2% of total revenue), DALEKOVOD has been under a lot of pressure with regard to servicing its loan principals and interest, which had a further negative impact on working capital and, consequently, on profitability. Having duly serviced the loan principal and having been blocked by banks in Q4 2012, DALEKOVOD decreased its financial indebtedness (principal amount) by HRK 67 million.

Although positive shifts were observed in the first two quarters with regard to profitability, the Management Board is aware that that it is necessary to continue the financial and operating restructuring efforts with a focus on further internationalization in the core business of building supporting infrastructure in the energy industry, and on selling non-core assets and reducing its loan debts. As a result of new circumstances, DALEKOVOD and its new Management Board will focus on finalizing the pre-bankruptcy process conducted against DALEKOVOD.

Key event during the 12-month period ended 31 December 2012

In July of 2012, the Supervisory Board relieved the former Management Board members Luka Miličić (Chairman) and Damir Skansi (member) of duty and appointed new Management Board members. As of 1 October 2012, the Management Board has comprised new members: Matjaž Gorjup - Chairman of the Management Board, Marko Jurković - Management Board member, Krešimir Anušić- Management Board member, and Željko Lekšić - Management Board member. In December of 2012, the Supervisory Board appointed Mr. Goran Braidić a new Management Board member responsible for financial operations.

Having met the requirements, the new Management Board made a resolution to file an petition for a prebankruptcy proceeding against DALEKOVOD in November of 2012, in accordance with the Financial Operations and Pre-bankruptcy Settlement Act. The petition was approved by FINA and a pre-bankruptcy proceeding was initiated on 20 December. Mr. Mladen Janiška was appointed the pre-bankruptcy commissioner.

DaLekovop

The primary tasks for the new Management Board are to successfully finalize the pre-bankruptcy proceeding and to continue implementing the defined measures of operating and financial restructuring by optimizing the balance sheet through reducing the loan debts and all fixed costs across DALEKOVOD and the entire Group, with a major emphasis on local and international market expansion.

It is important to underline that the Group has remained competitive despite the unfavorable 2012, both on the international and local markets, as confirmed by DALEKOVOD's new contracts worth HRK 400 million negotiated in 2012. It should also be underlines that DALEKOVOD is still intensively active in local and international tenders. To additionally enhance its competitiveness and exploit great opportunities on international markets, the Group has been decisive in implementing further measures for internal restructuring, optimizing its cost structure according to its strategy of further internationalization, and additionally optimizing its balance sheet through reducing its financial indebtedness by selling its entire non-core assets. Another significant fact is that the total value of DALEKOVOD's current contracts is approximately HRK 1.6 billion, and most of these contracts are planned to be performed in 2013.

As stated above, the new Management Board continues to implement strategic measures in connection with maintaining and prudently managing DALEKOVOD Group's liquidity, and focusing on developing risk management for all segments of company's business. Together with the new Management Board, the Supervisory Board enhanced monthly reporting on Group's cash receipts and expenditure, their comparison against the planned amounts, anticipated revenues for the upcoming period, and the financial debt repayment schedule (in line with the focus on and the need to reduce the debts). The Group has continuously integrated and improved its controlling system to efficiently monitor the planned savings measures and to reach the precrisis EBITDA margin between 7% and 10%.

Comment from the Management Board of Dalekovod d.d.

Considering the expected unfavorable macroeconomic environment, the Management Board believes that the implemented measures as mentioned in this Report, as well as further restructuring measures planned, confirm its intention to substantially and quickly adjust the interests of DALEKOVOD Group to those of its shareholders and creditors. In 2012, the impact of these measures is already reflected in decreased fixed costs, which will allow the Group to remain competitive in the long term and successfully pursue its business internationalization strategy.

After such adjustments in shareholders' and creditors' interest, we will focus on intensive penetration of international markets, as confirmed by the fact that we have been awarded a contract for equipping the Markovec tunnel in Slovenia (with our Slovenian partner), which is our first contract outside Croatia in the road and motorway segment, where y has proved to be highly successful. Group's competitiveness is also a result of several decades of excellent performance in implementing demanding projects, with an exhaustive list of international references and employee expertise. DALEKOVOD is one of the most important exporters in Croatia, negotiating profitable projects with high value added. The internal changes to be made will allow DALEKOVOD to ensure stable operation and reduce its financial exposure. During the upcoming period, the Management Board will primarily focus on optimizing the maturity of its financial debt and further optimizing its working capital, and will continue to undertake all measures necessary to ensure business sustainability and growth under the present circumstances.

For the Management Board: Matjaž Gorjup Chairman of the Management Board, Dalekovod d.d., signed EKt

$II.$ DECLARATION

Pursuant to Article 410, paragraph 2, and Article 407, paragraph 2, subparagraph 3, and paragraph 3 of the Capital Market Act, the persons responsible for preparing the Report: Matjaž Gorjup - Chairman of the Management Board, Krešimir Anušić - Management Board member, Marko Jurković - Management Board member, Željko Lekšić - Management Board member, and Goran Brajdić - Management Board member, hereby issue this

DECLARATION

To the best of our knowledge, the summary set of financial statements for DALEKOVOD and the Group, prepared in compliance with the appropriate financial reporting standards, provides a complete and true view of the assets and liabilities and business results of DALEKOVOD and the Group, with a brief comment on the causes of the stated information. The financial statements have not been audited.

For the Management Board:

Matjaž Gorjup Chairman of the Management Board, Dalekovod d.d., signed

Excellent

5

III. BALANCE SHEET

Name of position:	AOP	Previous year (net)	Current year (net)	Previous (net)
		DALEKOVOD jsc		DALEI
$\overline{1}$	$\overline{2}$	$\overline{3}$	$\overline{4}$	5 5
ASSETS
A) SUBSCRIBED CAPITAL UNPAID	001	O
B) NON CURRENT ASSETS (003+010+020+029+033)	002	1.127.395.180	1.051.497.662	1.222.22
I. INTANGIBLE ASSETS (004 do 009)	003	18.148.117	10.369,957	27.48
1. Research & Development expenditure	004 005	$\Omega$ 16.914.361	10.356.357	21.66
2. Patents, licences, royalties, trade marks, software&similar rights 3. Goodwill	006	$\Omega$	0	4.55
4. Prepayments for intangible assets	007	$\circ$	O
5. Intangible assets under construction	008	1.233.756	13.600	1.25
6. Other intangible assets	009		O
II. TANGIBLE ASSETS (011 do 019)	010	585.879.705	542.499.168	984.03
1. Land	011	164.913.887	164.913.887	212.12
2. Property	012	71,460,820	67.252.688	114.87
3. Plants and equipment	013	97.775.867	81.384.152	154.56
4. Tools, plants&vehicles	014	14.050.127	8.175.967	22.85
5. Biological asset	015		O
6. Prepayments for tangible assets	016	$\Omega$	0	$\overline{4}$
7. Assets under construction	017	7.100.194	0	248.72
8. Other tangible assets	018 019	230.578.810	220.772.474	230.85
9. Investments property III. NON-CURRENT FINANCIAL ASSETS (021 do 028)	020	523.367.357	498.628.537	210.71
1. Share in related parties	021	427.498.522	442.633.596	101.55
2. Loans to related parties	022	2.929.980		2.92
3. Participating interests (stakes)	023	30.277.334	26.455.988	30.32
4. Loans to participating interest	024	8.551.101	O	8.55
5. Investments in securities	025	28.053.190	25.902.009	29.87
6. Loans & deposits	026	26.057.230	3.636,944	26.13
7. Other non-current financial assets	027	$\circ$	0	11.34
8. Investment accounted by equity method	028	$\overline{0}$	$\mathbf{0}$
IV. TRADE RECEIVABLES (030 do 032)	029	$\bf{0}$	$\overline{0}$
1. Receivables from related parties	030	$\overline{0}$	0 $\overline{0}$
2. Receivables from credit sales	031 032	0 0	$\overline{0}$
3. Other receivables	033	$\overline{0}$	$\mathbf{0}$
V. DEFERRED TAX ASSETS C) CURENT ASSETS (035+043+050+058)	034	1.024.699.655	481.261.942	1.253.96
I. INVENTORIES (036 do 042)	035	20.144.725	14.766.044	189.96
1. Raw materials & consumables	036	14.390.404	12.368.844	77.11
2. Work in progress	037	0		12.78
3. Products	038	5.724.889	2.350.660	83.11
4. Merchandise	039	29.432	46.540	16.27
5. Prepayments for inventories	040	0	$\circ$	55
6. Other available-for-sale assets	041	0	$\overline{0}$	11
7. Biological asset	042	$\overline{O}$
II. RECEIVABLES (044 do 049)	043	838.895.899	378.194.044	919.19
1. Receivables from related parties	044 045	73.178.702 548.920.800	56.719.163 240.146.176	640.75
2. Trade receivables	046	4.037.721	516.632	4.03
3. Receivables from participating parties 4. Amounts receivable from employees	047	656,421	506.063	1.87
5. Receivables from government agencies	048	56.245.870	$\Omega$	65.42
6. Other receivables	049	155.856.385	80.306.010	207.09
III. CURRENT FINANCIAL ASSETS (051 do 057)	050	135.545.130	76.296.746	98.87
1. Share in related parties	051	0
2. Loans to related parties	052	48.684.603	71.086.026
3. Participating interests (stakes)	053
4. Loans to participating interest	054	9.631.534	311.737	9.63
5. Investments in securities	055	26.629	26.629
6. Loans & deposits	056	77.202.364	4.872.354	88.90
7. Other financial assets	057			3 1
IV. CASH ON HAND AND IN THE BANK	058	30.113.902	12.005.108	45.93
D) PREPAYMENTS AND ACCRUED INCOME	059	5.637.911	2.907.097	9.61 2,485.81
E) TOTAL ASSETS (001+002+034+059)	060	2.157.732.746 614.789.122	1.535.666.701 1.072.969.963	643.49
F) OFF-BALANCE SHEET ITEMS	061

ious year (net)	Current ye (net)
DALEKOVOD GROUP
	6
0	Ô 1.204.578.134
1.222.229.586 27.482.563	12.557.668
o	Ō
21 .669.580	12.062.698
4 .559.000	O Ö
.253.983 1	171.885
ö	323.084
984.034.145	1.007.173
212.124. 393 114.871.61 1	207. 470 100.450.
154 560.88	21. 35
22 851 30 1	16.789
Ō 44.595	118,952
248.725.10 1	2 325 357.69
	14.224
856 230 26 1	22 1 1 50
210.71 1. 44 551 5 101 20	184 847. 089 90 ю
929 980	Ō
24 30 6	.315.503 51
551	0
29.876.84 26.1	25,902,009 21 96
11.340 000	.621 1 ï 94
O	٥
38 1.4 O	Ò 0
Ō	Ő
.438 1	٥
0	0
1.253.962.988 189.960.872	737,867.957 164.422.581
7 Ī 1 7. 65	.227. 1 64
$\overline{2}$ 788. 1 435	23,803 9
110.705 83 70	48.313.4 16.693.030
27 1 6 55 $\overline{2}$ 703	265.4
1 1 7 671	119,142
0
919.192.995 0	504.513.785
640.754	392 880 566
4.037.72 1	1.068.019
.879 1 956 65.426 35	600.084 3.1 13 236
8	879 106.851
98.874.386	45.878.563
0	Ó
٥	ō ö
ö 9.631.534	311.737
26.629	662.563 12
88.905,357	543.397 32
310.866	360.866 23.053.028
45.934.735 9.619.059	16.172.771
2.485.811.633	1.958.618.862
643.491.396	1.719.229.954

Name of position:	AOP	Previous year (net)	Current year (net)	Previous year (net)	Current year (net)
		DALEKOVOD jsc		DALEKOVOD GROUP
	$\overline{2}$	$\overline{\mathbf{3}}$	$\overline{A}$	$\overline{5}$	6
EQUITY AND LIABILITIES
A) CAPITAL AND RESERVES (063+064+065+071+072+075+078)	062	583.638.994	191 218 982	610.228.565	228 052.941
I. SHARE CAPITAL	063	286.726.500	286.726.500	286.726.500	286.726.500
II. CAPITAL RESERVES	064	80.478.889	80.478.889	80.478.889	80.478.889
III. RESERVES FROM PROFIT (066+067-068+069+070)	065	434.445.578	157.131.299	441.552.955	149.502.282
1. Legal reserves	066	11.486.600	11.486.600	13.171.867	12.590.761
2. Reserves for own shares	067	7.773.071	7.773.071	7.773.071	7.773.071
Own shares and stakes (less)	068	7.773.071	7.773.071	7,773,071	7,773,071
Statutory reserves	069	310.195.565	32.881.286	310.420.110	32.966.988
Other reserves	070	112.763.413	112.763.413	117.960.978	103.944.533
IV. REVALUATION RESERVES	071	59.302.306	50.020.716	59.302.306	49.997.098
V. RETAINED EARNINGS OR LOSS BROUGHT FORWARD (073-074)	072	$\theta$	$\theta$	17.711.613	9.321.678
1. Retained earnings	073	$\overline{0}$	$\overline{0}$	27,868,908	32.510.812
2. Loss brought forward	074	0	$\Omega$	10.157.295	23.189.135
VI. PROFIT OR LOSS FOR THE FINANCIAL YEAR (076-077)	075	$-277.314.279$	-383.138.422	$-278.179.473$	-350.069.189
1. Profit for the financial year	076	$\Omega$		$\Omega$	#REF!
2. Loss for the financial year	077	277.314.279	383.138.422	278.179.473	350.069.189 2.095.683
VII. MINORITY INTEREST	078	$\Omega$		2.635.775 7.068.583	8.581.157
B) PROVISIONS (080 do 082)	079 080	3.762.000	3.762.000		8.062.367
1. Provisions for pensions, severance pay and similar libabilities	081	3,762,000 $\mathbf{O}$	3.762.000 $\bf{0}$	6,579.068 $\circ$	32.823
2. Provisions for tax obligations 3. Other provisions	082	$\overline{0}$	$\circ$	489.515	485.967
C) NON-CURRENT LIBILITIES (084 do 092)	083	482.436.118	471.723.206	672.477.705	716.252.435
1. Liabilites to related parties	084	$\overline{0}$	0	633,333	$\overline{0}$
2. Liabilities for loans, deposits and other	085	$\overline{0}$			$\circ$
3. Liabilities towards banks and other financial institutions	086	329.101.121	334.650.265	517.686.271	578.731.473
4. Amounts payable for prepayment	087
5. Trade payables	088	153.334.997	137.072.941	154.158.101	137.520.962
6. Amounts payable for securities	089	$\overline{0}$			$\bf{0}$
7. Liabilities toward participating interests	090	$\circ$	$\circ$	0	$\circ$
8. Other non-current liabilities	091	$\overline{0}$		0	0
9. Deffered tax	092				$\Omega$
D) CURRENT LIABILITIES (094 do 105)	093	1.084.844.932	868.962.513	1.192.865.836	993 522 696
1. Liabilites to related parties	094	52.724.327	95.425.884		$\Omega$
2. Liabilities for loans, deposits and other	095	1.159.071	34.691.571	1.226.407	35.327.840
3. Liabilities towards banks and other financial institutions	096	356,960.472	308.006.749	407.334.632	350.067.350
4. Amounts payable for prepayment	097	196.951.533	41.847.110	224.669.303	44.387.446
5. Trade payables	098	355.053.342	294.342.242	415.550.167	429.120.901
6. Amounts payable for securities	099	64.948.782	57.407.251	64.948.782	57.407.251
7. Liabilities toward participating interests	100	1,906.148	6.464.836	1.906.148	6,464,836
8. Liabilities to emloyees	101	17.345.107	9.984.549	23.668.192	18.565.027
9. Taxes, contributions and similar liabilities	102	4.777.585	11.760.047	16.922.163	36.733.642
10. Liabilities arising from share in the result	103	1.899.762	1.899.762	2.899.762	1.899.762
11. Liabilities arising from non-current assets held for sale	104	$\Omega$		$\circ$	O
12. Other current liabilities	105	31.118.803	7.132.512	33.740.280	13.548.641
E) ACCRUED EXPENSES AND DEFERRED INCOME	106	3.050.702		3.170.944	12 209.634
F) TOTAL LIABILITIES (062+079+083+093+106)	107	2.157.732.746	1.535.666.701	2.485.811.633	1.958.618.862
G) OFF-BALANCE SHEET ITEMS	108	614.789.122	1.072.969.963	643.491.396	1.719.229.954
ANNEX TO THE BALANCE SHEET (to be filled in by a company preparing the consolidated annual financial statements)
A) CAPITAL AND RESERVES
1. Attributable to equity holders of the parent company's capital	109			607.592.790	225.957.258
2. Attributable to non-controlling interests	110			2.635.775	2.095.683

IV. COMPREHENSIVE INCOME STATEMENT

ITEM	AOP	2011	2012	2011	2012
1	$\overline{2}$	$\overline{\mathbf{3}}$	$\overline{4}$	$\overline{5}$	6
			DALEKOVOD J.S.C.	DALEKOVOD GROUP
I. OPERATING INCOME (112+113)	111 112	1.037.285.479	887.849.691 869,667.279 0	1.163.704.924 1.129.182.694	1.255,632.893 1.235.572.312
1. Sales revenue 2. Other operating income	113	1.002.091.799 35.193.680	18.182.412 0	34.522.230	20.060.581
II, OPERATING EXPENSES (115+116+120+124+125+126+129+130)	114	1.075.160.811	1.202.026.096	1.366.002.506	1.542.361.630
1. Changes in inventories of finished products and work in progress	115	69.388.438	3.374.413	61.166.225	23.716.447
2. Material costs (117 do 119)	116	709.039,928	751.168.290	792.716.257	920.684.599
a) Cost of raw materials & consumables	117	133,222.897	178.760.115	152.437.634	439,619,374
b) Cost of goods sold	118	165,661,347	122.430,680	216.804.746	41.477.818
c) Other costs	119	410.155.684	449.977.495 142,955,122	423.473.877 255.763.959	439.587.407 246.232.680
3. Staff costs (121 do 123) a) Net salaries	120 121	130.911.500 89.071.983	91.098.577	163.825.146	154.531.247
b) Employee income tax	122	26,936,936	25.214.560	58,126.110	52.434.094
c) Tax on payroll	123	14.902.581	26.641.985	33.812.703	39.267.340
4. Depreciation and amortisation	124	36.600.924	39.064.422	64.610.028	50.489.604
5. Other expenditures	125	97.878.321	118,615,313	159.185.364	149.225.934
6. Value adjustment (127+128)	126	9.199.298	102.023.698	14.855.050	103.128.486
a) non-current assets (without financial assets)	127		2.529.939		2.529.939
b) current asssets (without financial assets)	128 129	9.199.298	99.493.759	14.855.050 74,743	100.598.547 $\mathbf{O}$
7. Provisions 8. Other operating expenses	130	22.142.402	44.824.838	27.730.880	48.883.879
III. FINANCIAL INCOME (132 do 136)	131	7.613.930	7.855.035	7.747.128	9.463.212
1. Interest income, foreign exhange differences, dividends and other financial			2.519.228	2.256.330	3,836,401
income related to subsidiaries	132	2.152.928
2. Interest income, foreign exchange differences, dividends and other financial	133	4.059.009	4,997,495	4.086.117	5.282.477
income related to third parties 3. Part of income from associates and participating interests	134	1.401.993	338.312	1.401.993	338.312
4. Unrealized gains (income) from the financial assets	135		$\circ$		n
5. Other financial income	136		0	2.688	6.021
IV. FINANCIAL COSTS (138 do 141)	137	72.135.796	76.817.052	80.176.383	78.448.680
1. Interest, foreign exchange dfifferences and other expenses related to subsidiaries	138	304.498	869,106	679.311	997.571
2. Interest, foreign exchange differences and other expenses related to third parties	139	67.125.179	61.359.226	74.590.870 544.529	62.802.173 7.461.907
3. Unrealized loss (expenses) from the financial assets	140	496,819 4.209.300	7.461.907	4.361.673	7.187.029
4. Other financial expenses SHARE OF INCOME OF ASSOCIATES	141 142		7.126.813 $\circ$	398.448	3.815.810
SHARE OF LOSS OF ASSOCIATES	143	$\Omega$	$\bf{0}$		O
VII. EXTRAORDINARY - OTHER INCOME	144	Ð	$\circ$		9.645.845
VIII. EXTRAORDINARY - OTHER EXPENSES	145	171.999.141	$\overline{0}$		143
IX. TOTAL INCOME (111+131+142+144)	146	1.044.899.409	895.704.726	1.171.850.500	1.278.567.759
TOTAL EXPENSES (114+137+143+145)	147	1.319.295.748	1.278.843.148	1.446.178.88	1.620.810.454
XI. PROFIT OR LOSS BEFORE TAX (146-147)	148	$-274,396,339$	$-383.138.422$	$-274.328.389$ n	-342.252.694 $\Omega$
1. Profit before tax (146-147)	149 150	274.396.339	383.138.422	274.328.389	342.252.694
2. Loss before tax (147-146) XII. INCOME TAX EXPENSE	151	2.917.940		4.009.053	7.831.813
XIII. PROFIT OR LOSS FOR THE PERIOD (148-151)	152	$-277.314.279$	-383.138.422	$-278.337.442$	-350.084.507
1. Profit for the period (149-151)	153
2. Loss for the period (151-148)	154	277.314.279	383.138.422	278.337.442	350.084.507
ANNEX TO THE PROFIT AND LOSS ACCOUNT (to be filled in by entities submitting consolidated financial statements)
XIV. PROFIT OR LOSS FOR THE PERIOD
1. Attributable to owners of the company	155 156		٥ ٥	$-278.179.473$ $-157.969$	$-350.069.189$ $-15.318$
2. Attributable to non-controlling interests STATEMENTS OF COMPREHENSIVE INCOME (to be filled by entities who work in compliance with IFRS)					O
PROFIT OR LOSS FOR THE PERIOD (= 152)	157	$-277.314.279$	$-383.138.422$	$-278.337.442$	-350.084.507
II. OTHER COMPREHENSIVE INCOME /LOSS BEFORE TAX (159 do 165)	158	44.264.589	0	46.841.574	0
1. Exchange differences arising from foreign operations	159		o	2.576.985	O
2. Revaluation of non-current assets and intangible assets	160	50.020.716	٥	50.020.716	0
3. Gains or loss available for sale investments	161	$-5,756,127$	0	$-5.756.127$	0
4. Gains or loss on net movement on cash flow hedges	162		0		0
5. Gains or loss on net investments hedge	163		0		0
6. Share of the other comprehensive income/loss of associates	164		O		0 0
7. Acturial gain / loss on post employment benefit obligations III. TAX ON OTHER COMPREHENSIVE INCOME OF THE PERIOD	165 166		$\bullet$ o		O
IV. NET OTHER COMPREHENSIVE INCOME OR LOSS FOR THE YEAR (158-166)
RAZDOBLJA (158-166)	167	44.264.589		46.841.574	0
V. TOTAL COMPREHENSIVE INCOME/LOSS FOR THE PERIOD (157+167)	168	$-233.049.690$	$-383.138.422$	$-231.495.868$	-350.084.507
APPENDIX Statement of Comprehensive Income (to be filled in by entities submitting consolidated financial statements)					o
VI. TOTAL COMPREHENSIVE INCOME/LOSS FOR THE PERIOD			$\circ$		0
1. Attributable to owners of the company	169		o	$-231.408.671$	$-360.069.189$
2. Attributable to non-controlling interests	170		ö	$-87.197$	$-15.318$

V. CASH FLOW STATEMENT

$\overline{1}$ $\overline{2}$ $3\overline{3}$ 5 6 4 DALEKOVOD GROUP DALEKOVOD jsc CASH FLOW FROM OPERATING ACTIVITIES $-342.252.694$ -274.328.389 $-274.396.339$ -383.138.422 1. Pre-tax profit 001 54.510.028 36.600.924 39.064.422 2. Depreciation 002 323.929.451 3. Increase in short-term liabilities 003 237.196.099 004 196.029.554 4. Decrease in short-term receivables $\Omega$ 164.766.441 5. Reduction of stocks 005 294.622.721 5.378.681 323.600.797 323.600.797 6. Other increase in cash flow 006 180.935.032 268.877.531 007 294.023.405 Total increase in cash flow from operating activities (001 to 006) 1. Decrease in short-term liabilities 008 157.084.372 85.718.115 151.231.243 2. Increase in short-term receivables 009 010 3. Increase in stocks 15.654.761 2.302.793 37.135.474 011 4. Other decrease in cash flow 159.387.165 188.366.717 137.101.343 012 101.372.876 Il Total decrease in cash flow from operating activities (008 to 011) 21.547.867 A1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES 013 192.650.529 80.510.814 A2) NET DECREASE IN CASH FLOW FROM OPERATING ACTIVITIES 014 0 CASH FLOW FROM INVESTMENT ACTIVITIES 49.939.456 718,950 49.939.456 1. Cash receipts from sale of fixed tangible and intangible assets 015 125.912.799 20.603.667 303.240.205 40.624.458 016 2. Cash receipts from sale of treasury and debt financial instruments 374.967 017 1.305.032 374.967 1.311.247 3. Cash receipts from interests 4. Cash receipts from dividends 018 25.543.844 632.066 25.543.844 5. Other cash receipts from investment activities 019 $\overline{0}$ 67.262.219 177.157.287 355.122.974 020 47.241.428 III. Total cash receipts from investment activities (015 do 019) 4.554.849 69.055.954 59.422.891 021 5.720.341 1. Expenditures for buying fixed assets and intangible assets 15.135.074 368.986.015 2. Expenditures for purchasing treasury and debt financial instruments 022 368.986.015 15.135.074 023 95.914.739 65.466.774 3. Other expenditures from investment activities 374.706.356 533.956.708 140.024.739 024 19.689.923 IV. Total expenditures from investment activities (021 to 023) 025 27.551.505 B1) NET INCREASE IN CASH FLOW FROM INVESTMENT ACTIVITIES 178.833.734 72.762.520 197.549.069 b2) NET DECREASE IN CASH FLOW FROM INVESTMENT ACTIVITIES 026 CASH FLOW FROM FINANCIAL ACTIVITIES 47.224.260 1. Cash receipts from issuance of treasury and debt financial instruments 47.224.260 027 61.045.201 5.549.144 803.129.504 028 680.769.529 2. Cash receipts from loan principal, bonds, borrowings and other loans 029 76.829.287 3. Total cash receipts from financial activities 0 61.045.201 727.993.789 5.549.144 927.183.051 030 V. Total cash receipts from financial activities (027 To 029) 779.432.659 64.808.813 031 759.295.323 56.495.254 1. Expenditures for repayment of loan principal and bonds 032 2. Expenditures for payment of dividends 0 16.637.139 19.777.311 16.262.056 19.943.870 3. Expenditures for financial leasing 033 034 4. Expenditures for redemption of treasury shares 0 035 82.962.010 ۵l 5. Other expenditures from financial activities 81.445.952 779.072.634 72.757.310 882.338.539 VI. Total expenditures from financial activities (031 to 035) 036 C1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES 44.844.512 037 20.400.751 51.078.845 67.208.166 C2) NET DECREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES 038 $\Box$ Total increase in cash flow (013 - 014 + 025 - 026 + 037 - 038) 039 53.478.408 55.977.385 18.108.794 Total decrease in cash flow (014 - 013 + 026 - 025 + 038 - 037) 040 99.413.143 86.091.287 30.113.902 Cash and cash equivalents at the beginning of the period 041 Increase in cash and cash equivalents 042 22.881.707 53.478.408 55.977.385 18.108.794 Decrease in cash and cash equivalents 043	ITEM	AOP	Previous period	Current period	Previous period	Current period
						50.489.604
						150.006.909
						25.538.291
						207.382.907
						132.864.868
						$\overline{0}$
						$\Omega$
						4.236.475
						70.281.564
						$\theta$
						718.950
						$\Omega$
						$\theta$
						0
						$\circ$
						$\overline{0}$
						$\circ$
						0
						$\theta$
						$\circ$
						22.881.707
						45.934.735
						$\Omega$
	Cash and cash equivalents at the end of the period	044	30.113.902	12.005.108	45.934.735	23.053.028

VI. STATEMENT OF CHANGES IN EQUITY

	AOP	Previous period	Current period	Previous period	Current period
			DALEKOVOD jsc		DALEKOVOD GROUP
Share capital	001	286.726.500	286.726.500	286.726.500	286.726.500
2. Capital reserves	002	80.478.889	80.478.889	80.478.889	80.478.889
3. Reserves from profit	003	434.445.578	157.131.299	441.552.955	149.502.282
4. Retained profit or loss carried forward	004			17.711.613	9.321.678
5. Profit or loss of current year	005	$-277.314.279$	-383.138.422	$-278.179.473$	$-350.069.189$
6. Revaluation of longterm tangible assets	006	50.020.716	50.020.716	50.020.716	49.997.098
7. Revaluation of intangible assets	007
8. Revaluation of financial assets available for sale	008	9,281,590		9.281.590
9. Other revaluations	009
10. Total equity and reserves (AOP 001 to 009)	010	583,638,994	191.218.982	607.592.790	225.957.258
11. Foreign exchange differences arising from the titles of net investment in foreign operations	011
12. Current and deferred taxes (part)	012
13. Cash flow protection	013
14. Changes in accounting policies	014
15. Correction of significant errors in the previous period	015
16. Other changes in equity	016
17. Total increase or decrease in equity (AOP 011 to 016)	17	٥۱	n	o
17 a. Attributed to parent company equity holders	018			607.592.790	225.957.258
17 b. Attributed to minority interest	019			2.635.775	2.095.683

VII. NOTES TO FINANCIAL STATEMENTS

1. MANAGEMENT BOARD MEMBERS

• 1. Chairman: Matjaž Gorjup, M-Mech.Eng.
• 1. Member: Krešimir Anušić, M-El.Eng.
• 1. Member: Marko Jurković, M-El.Eng.; M-Econ.
• 1. Member: Željko Lekšić, M-Mech.Eng.
• 1. Member: Goran Brajdić, M-Econ.

2. SUPERVISORY BOARD MEMBERS

Chairman: Marijan Pavlović, LLM Member: Nataša Ivanović, M-Econ. Member: Dubravko Štimac, MSc, M-Econ. Member: Davor Doko, M-Econ. Member: Ante Curković, PhD, M-Eng. Member: Viktor Miletić

3. SHAREHOLDING STRUCTURE (as at 31.12.2012):

NATURAL PERSONS	1,478,039
PENSION FUNDS	636,237
BANKS	303,486
TELEGRA d.o.o.	164,753
OTHERS	240,816
OWN SHARES	43,934
TOTAL	2,867,265

4. MERGERS AND CONSOLIDATIONS

There were no mergers and acquisitions in 2012.

5. UNCERTAINTY

Dubious and disputed receivables were identified in 2012, which affected the result.

6. DESCRIPTION OF PRODUCTS AND SERVICES

Over time, Dalekovod d.d. has become specialized in performing turnkey contracts in the following areas:

• electrical facilities, especially transmission lines between 0.4 and 500 kV
• substations of all types and voltage levels of up to 500 kV
• air, underground and underwater cables of up to 110 kV
• telecommunication facilities
• all types of networks and antennas
• production of suspension ad joining equipment for all types of transmission lines and substations of 0.4 to 500 kV

· production and installation of all metal components for roadways, especially for road lighting, crash barriers and traffic signalization

• tunnel lighting and traffic management
• · electrification of railways and tramways

7. CHANGES IN ACCOUNTING POLICIES

There are no new accounting policies.