Dalekovod d.d. — Management Reports 2016

Feb 25, 2016

Zagreb, 16 February 2016.

MANAGEMENT REPORT JAN-DEC 2015 Unaudited, unconsolidated

* IMPORTANT NOTE TO THE MANAGEMENT REPORT:

As an integral part of the Management Report, the financial statements provided below are preliminary, unaudited, unconsolidated statements.

Discrepancies may occur between the preliminary and final financial statements for the Company, which will not significantly affect the Company's business performance.

The Company's annual audited financial statements will be published within the statutory time limit, by 30 April 2016.

• MANAGEMENT BOARD'S REPORT $\mathbb{L}$
• $\mathbf{H}$ DECLARATION
• $III.$ BALANCE SHEET
• IV. STATEMENT OF COMPREHENSIVE INCOME
• CASH FLOW STATEMENT $V_{\perp}$
• $VI.$ STATEMENT OF CHANGES IN EQUITY
• VII. NOTES TO FINANCIAL STATEMENTS

MANAGEMENT BOARD'S REPORT

L

According to the preliminary unaudited information, Dalekovod Group's (the "Group") EBIDTA was HRK 116.9 million. In the same period last year, the Group recorded an operating loss of HRK 65.8 million. Such sharp increase in EBIDTA compared to the preceding years is a result of operational restructuring of Dalekovod Group (the "Group") undertaken through reorganization of processes and business rationalization, as well as new contract awarded that resulted in increased revenue in 2015 amounting to HRK 1,290 million, 32% more than in 2014. The net income obtained by Dalekovod Group in 2015 was HRK 27.2 million.

During the same period, Dalekovod d.d. (the "Company") obtained unaudited EBITDA of HRK 96.9 million, compared to a loss of HRK 1.4 million in 2014. Such sharp increase in Company's EBIDTA is a result of more stringent cost control, establishment of central cost and procurement management for the Group within Dalekovod d.d., restructuring processes, and a positive outcome of an arbitration settlement in connection with a project in Albania.

The Company's operating revenue in 2015 was HRK 1,013.9 million, 43% more than in 2014. Such performance is mostly a result of the operating revenue obtained from projects awarded on international markets (Norway, Ukraine, Kosovo) and positive financial effects on retained earnings from previous periods in a total amount of HRK 28.1 million, arisen from a change in the estimation of average project margins, which also helped increase the Group's current income.

The Company's business in 2015 was marked by positive shifts in Company's and Group's operations:

• The Company is being restructured as planned;
• Strong focus on obtaining new contracts abroad; and
• Appointment of new Management Board members in the Company:

The Company's and Group's strategy includes a strong focus on international markets. The Company and its management are aware it is crucial to continue with further optimization of fixed costs for the Company to adapt to the newly emerged setting of reduced demand on the local market and prepare for penetrating international markets.

During the past period, the Company used additional efforts to obtain projects on international markets. The Company is implementing projects in Norway, Finland, Ukraine, Kosovo, Poland, Slovenia, Montenegro, Macedonia, and Bosnia and Herzegovina.

The Group and the Company are competing in a number of tenders in the country and abroad to contract new works and meet the plan for sustainable growth of revenue in the upcoming years. As a result of strong international activity, the Company is expected to be awarded significant new contracts abroad, of which the Company will promptly notify its shareholders.

For the Management Board: Alen Preprozak Chairman of the Management Board Dalekovod d.d.. eko

Pursuant to Article 410, paragraph 1, and Article 407, paragraph 2, subparagraph 3 and paragraph 3 of the Capital Market Act, the persons responsible for preparing the financial statements: Alen Premužak, Chairman of the Management Board, Branimir Alujević, Management Board Member, Helena Jurčić Šestan, Management Board Member, Marko Jurković, Management Board Member, and Mirko Leko, Management Board Member, hereby make this

DECLARATION

To the best of our knowledge, the financial statements for the reporting period, prepared in compliance with the appropriate financial reporting standards, provide a full and true view of the assets, liabilities and income of DALEKOVOD and the companies included in consolidation, with a brief comment on the causes of the information provided. The financial statements have not been audited.

For the Management Board Alen Premizak Chairman of the Management Board Dalekovod d.d. Beat EKO

Name of position:	AOP	Previous year (net)	Current year (net)	Previous year (net)	Current year (net)
			DALEKOVOD jsc		DALEKOVOD GROUP
1	2	3	4	5	6
ASSETS
A) SUBSCRIBED CAPITAL UNPAID	001	0	0	0	0
B) NON CURRENT ASSETS (003+010+020+029+033)	002	1.068.950.323	1.014.055.501		1.214.364.820 1.137.989.385
I. INTANGIBLE ASSETS (004 to 009)	003	19.142.919	14.934.574	22.182.740	17.776.887
1. Research & Dev elopment expenditure	004	0	0		0
2. Patents, licences, roy alties, trade marks, sof tware&similar rights	005	19.141.032	14.135.838	20.969.740	15.637.151
3. Goodwill	006	0	0	1.213.000	1.213.000
4. Prepay ments f or intangible assets	007	0	0		0
5. Intangible assets under construction	008	1.887	798.736		926.445
6. Other intangible assets	009	0	0		290
II. TANGIBLE ASSETS (011 to 019)	010	497.507.434	487.561.790	962.099.614	929.051.369
1. Land 2. Property	011 012	164.913.887 53.740.411	166.071.529 55.173.659	246.325.821 229.547.969	246.495.402 205.060.763
3. Plants and equipment	013	61.144.279	49.848.057	95.808.778	97.063.762
4. Tools, plants&v ehicles	014	2.062.782	2.286.758	11.720.396	12.087.617
5. Biological asset	015	0	0		0
6. Prepay ments f or tangible assets	016	0	0		45.217
7. Assets under construction	017	0	0	12.861.258	11.175.360
8. Other tangible assets	018	0	0		0
9. Inv estments property	019	215.646.075	214.181.787	365.835.392	357.123.248
III. NON-CURRENT FINANCIAL ASSETS (021 to 028)	020	485.835.440	482.783.718	157.986.706	161.864.634
1. Share in related parties	021	287.780.917	285.996.508		0
2. Loans to related parties	022	13.921.127	13.726.840		0
3. Participating interests (stakes)	023	20.238.100	20.239.981	14.653.574	14.671.211
4. Loans to participating interest	024	0	0		0
5. Inv estments in securities	025	9.856.565	4.255.496	10.269.173	4.533.570
6. Loans & deposits	026	2.680.872	8.334.875	5.568.987	16.114.907
7. Other non-current f inancial assets	027	151.357.859	150.230.018	127.494.972	126.544.945
8. Inv estment accounted by equity method	028	0	0		0
IV. TRADE RECEIVABLES (030 to 032)	029	66.464.530	28.775.419	72.095.760	29.296.496
1. Receiv ables f rom related parties 2. Receiv ables f rom credit sales	030 031	0 0	0 0		0 0
3. Other receiv ables	032	66.464.530	28.775.419	72.095.760	29.296.496
V. DEFERRED TAX ASSETS	033	0	0
C) CURENT ASSETS (035+043+050+058)	034	521.722.283	716.044.728	788.595.253	953.744.164
I. INVENTORIES (036 to 042)	035	20.313.480	22.852.111	211.669.333	183.549.563
1. Raw materials & consumables	036	19.725.812	20.551.573	83.113.674	68.650.018
2. Work in progress	037	0	0	14.574.519	13.436.279
3. Products	038	580.545	552.608	39.548.664	27.191.229
4. Merchandise	039	7.123	1.747.930	8.534.589	8.956.108
5. Prepay ments f or inv entories	040	0	0	855.040	722.336
6. Other av ailable-f or-sale assets	041	0	0	65.042.847	64.593.592
7. Biological asset	042	0	0		0
II. RECEIVABLES (044 to 049)	043	384.727.856	523.972.858	442.338.224	587.143.338
1. Receiv ables f rom related parties	044	55.330.944	34.482.999		0
2. Trade receiv ables	045	274.029.761	404.612.741	377.660.030	485.460.561
3. Receiv ables f rom participating parties	046	1.108.572	715.227	1.335.788	855.675
4. Amounts receiv able f rom employ ees	047	99.610	266.880	176.622	346.575
5. Receiv ables f rom gov ernment agencies	048	15.489.948	28.897.201	24.771.624	32.995.455
6. Other receiv ables I I I C U R R E N T F I N AN C I AL AS S E TS ( 0 5 1 t o 0 5 7 )	049 050	38.669.021 74.918.463	54.997.810 87.147.952	38.394.160 68.200.482	67.485.073 80.182.421
1. Share in related parties	051	0	0	0	0
2. Loans to related parties	052	17.702.151	30.106.119	0	0
3. Participating interests (stakes)	053	0	0	0	0
4. Loans to participating interest	054	2.000.000	0	2.000.000	0
5. Inv estments in securities	055	40.177.710	30.377.143	40.679.848	30.377.143
6. Loans & deposits	056	15.038.602	26.664.690	25.520.634	49.769.297
7. Other f inancial assets	057	0	0		35.980
IV. CASH ON HAND AND IN THE BANK	058	41.762.484	82.071.807	66.387.214	102.868.843
D) PREPAYMENTS AND ACCRUED INCOME	059	243.351	849.861	6.802.740	19.755.048
E) TOTAL ASSETS (001+002+034+059)	060	1.590.915.957	1.730.950.090		2.009.762.813 2.111.488.597
F) OFF-BALANCE SHEET ITEMS	061	441.662.074	652.402.930	479.622.013	680.018.852

Name of position:	AOP	Previous year (net)	Current year (net)	Previous year (net)	Current year (net)
			DALEKOVOD jsc		DALEKOVOD GROUP
1	2	3	4	5	6
EQUITY AND LIABILITIES
A) CAPITAL AND RESERVES (063+064+065+071+072+075+078)	062	293.976.248	336.354.147	298.741.567	325.519.620
I. SHARE CAPITAL	063	247.193.050	247.193.050	247.193.050	247.193.050
II. CAPITAL RESERVES	064	86.141.670	86.141.670	86.141.670	86.141.670
III. RESERVES FROM PROFIT (066+067-068+069+070)	065	44.368.886	44.325.747	74.098.665	82.213.202
1. Legal reserv es	066	11.486.600	11.486.600	11.651.984	11.652.410
2. Reserv es f or own shares	067	7.773.071	7.816.210	7.773.071	7.816.210
3. Own shares and stakes (less)	068	7.773.071	7.816.210	7.773.071	7.816.210
4. Statutory reserv es	069	32.882.286	32.839.147	32.882.286	32.881.837
5. Other reserv es	070	0	0	29.564.395	37.678.955
IV. REVALUATION RESERVES	071	40.014.573	40.014.573	40.014.627	40.014.573
V. RETAINED EARNINGS OR LOSS BROUGHT FORWARD (073-074)	072	-159.390.318	-123.741.931	-116.247.569	-156.333.159
1. Retained earnings	073	0
2. Loss brought f orward	074	159.390.318	123.741.931	116.247.569	156.333.159
VI. PROFIT OR LOSS FOR THE FINANCIAL YEAR (076-077)	075	35.648.387	42.421.038	-31.811.790	27.506.056
1. Prof it f or the f inancial y ear	076	35.648.387	42.421.038		27.506.056
2. Loss f or the f inancial y ear	077	0	0	31.811.790
VII. MINORITY INTEREST	078	0	0	-647.086	-1.215.772
B) PROVISIONS (080 to 082)	079	6.172.600	6.115.600	9.458.957	9.625.202
1. Prov isions f or pensions, sev erance pay and similar libabilities	080	6.172.600	6.115.600	7.029.074	9.584.354
2. Prov isions f or tax obligations	081	0	0		0
3. Other prov isions	082	0	0	2.429.883	40.848
C) NON-CURRENT LIBILITIES (084 to 092)	083	704.461.778	656.992.183	672.770.303	607.896.643
1. Liabilites to related parties	084	59.201.247	49.626.823
2. Liabilities f or loans, deposits and other	085	0	0		0
3. Liabilities towards banks and other f inancial institutions	086	407.616.798	407.616.799	429.230.879	407.763.152
4. Amounts pay able f or prepay ment	087	0	0		0
5. Trade pay ables	088	204.382.993	168.416.882	210.278.684	168.801.811
6. Amounts pay able f or securities	089	20.144.118	20.890.822	20.144.118	20.890.822
7. Liabilities toward participating interests	090	3.112.479	436.714	3.112.479	436.714
8. Other non-current liabilities	091	0	0		0
9. Def f ered tax	092	10.004.143	10.004.143	10.004.143	10.004.143
D) CURRENT LIABILITIES (094 to 105)	093	574.108.756	716.305.798		1.016.595.411 1.153.264.771
1. Liabilites to related parties	094	31.312.674	50.931.634		0
2. Liabilities f or loans, deposits and other	095	0	350.398		391.798
3. Liabilities towards banks and other f inancial institutions	096	220.519.103	220.472.295	541.119.870	554.111.565
4. Amounts pay able f or prepay ment	097	100.166.424	117.497.807	103.831.552	120.841.766
5. Trade pay ables	098	177.131.926	271.093.119	232.025.669	336.330.828
6. Amounts pay able f or securities	099	0	0		0
7. Liabilities toward participating interests	100	0	304.835	586.699	1.876.355
8. Liabilities to emloy ees	101	6.086.482	14.336.238	29.010.192	34.560.329
9. Taxes, contributions and similar liabilities	102	23.654.904	24.797.415	33.287.319	31.805.838
10. Liabilities arising f rom share in the result	103	1.899.762	100.985	1.899.762	100.985
11. Liabilities arising f rom non-current assets held f or sale	104	0	0		0
12. Other current liabilities	105	13.337.481	16.421.072	74.834.348	73.245.307
E) ACCRUED EXPENSES AND DEFERRED INCOME	106	12.196.575	15.182.362	12.196.575	15.182.362
F) TOTAL LIABILITIES (062+079+083+093+106)	107	1.590.915.957	1.730.950.090		2.009.762.813 2.111.488.598
G) OFF-BALANCE SHEET ITEMS	108	441.662.074	652.402.930	479.622.013	680.018.852
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			299.388.653	326.735.392
2. Attributable to non-controlling interests	110			-647.086	-1.215.772

Name of position	AOP	Previous period	Current period	Previous period	Current period
1	2	3	4	5	6
			DALEKOVOD J.S.C.		DALEKOVOD GROUP
I. OPERATING INCOME (112+113) 1. Sales rev enue	111 112	708.580.576 692.927.642	1.013.858.511 930.677.623	976.455.817 957.796.283	1.289.619.634 1.204.397.983
2. Other operating income	113	15.652.934	83.180.888	18.659.534	85.221.651
II. OPERATING EXPENSES (115+116+120+124+125+126+129+130)	114	743.088.544	950.912.463	1.092.547.111	1.223.661.754
1. Changes in inv entories of f inished products and work in progress	115	90.478	75.889	-14.305.399	11.416.677
2. Material costs (117 to 119) a) Cost of raw materials & consumables	116 117	449.857.283 72.029.694	649.832.391 175.809.829	587.045.664 129.858.676	741.849.860 223.123.750
b) Cost of goods sold	118	59.833.307	127.533.607	92.296.581	144.752.228
c) Other costs	119	317.994.282	346.488.955	364.890.407	373.973.882
3. Staf f costs (121 to 123)	120	110.140.224	138.159.208	209.265.699	231.192.659
a) Net salaries b) Employ ee income tax	121 122	75.250.012 22.361.602	95.837.507 27.006.259	136.704.665 44.098.885	152.072.401 50.321.688
c) Tax on pay roll	123	12.528.610	15.315.442	28.462.149	28.798.569
4. Depreciation and amortisation	124	33.152.849	33.950.124	50.264.221	50.889.175
5. Other expenditures	125	95.689.255	124.636.202	108.250.067	167.786.718
6. Value adjustment (127+128) a) non-current assets (without f inancial assets)	126 127	39.615.893 0	1.551.916 0	106.920.265 70.232.473	6.019.940 0
b) current asssets (without f inancial assets)	128	39.615.893	1.551.916	36.687.792	6.019.940
7. Prov isions	129	3.324.600	1.695.116	3.538.993	1.749.093
8. Other operating expenses	130	11.217.962	1.011.617	41.567.601	12.757.631
I I I F I N AN C I AL I N C O ME ( 1 3 2 t o 1 3 6 )	131	270.404.628	99.689.225	239.460.141	99.231.914
1. Interest income, f oreign exhange dif f erences, div idends and other f inancial income related to subsidiaries	132	32.211.393	13.614.979	0	0
2. Interest income, f oreign exchange dif f erences, div idends and other f inancial
income related to third parties	133	55.233.416	85.267.838	55.013.465	98.396.646
3. Part of income f rom associates and participating interests	134	0	0	0	0
4. Unrealized gains (income) f rom the f inancial assets	135	0	0	0	0
5. Other f inancial income	136	182.959.819	806.408	184.446.676	835.269
IV. FINANCIAL COSTS (138 to 141) 1. Interest, f oreign exchange df if f erences and other expenses related to	137	177.473.169	99.849.045	123.221.846	116.419.495
subsidiaries	138	1.503.617	1.972.328	0	0
2. Interest, f oreign exchange dif f erences and other expenses related to third parties	139	54.825.533	90.162.140	73.922.708	108.535.414
3. Unrealized loss (expenses) f rom the f inancial assets	140	90.254.436	2.295	18.409.555	2.423
4. Other f inancial expenses	141	30.889.583	7.712.282	30.889.583	7.881.659
V. SHARE OF INCOME OF ASSOCIATES	142	0	0	0	354.947
VI. SHARE OF LOSS OF ASSOCIATES	143	0	0	7.287.357	790.469
VII. EXTRAORDINARY - OTHER INCOME	144	0	0	0	0
VIII. EXTRAORDINARY - OTHER EXPENSES	145	0	0	0	0
IX. TOTAL INCOME (111+131+142 + 144) X. TOTAL EXPENSES (114+137+143 + 145)	146 147	978.985.204 920.561.713	1.113.547.736 1.050.761.508	1.215.915.958 1.223.056.314	1.389.206.496 1.340.871.718
XI. PROFIT OR LOSS BEFORE TAX (146-147)	148	58.423.491	62.786.228	-7.140.355	48.334.778
1. Prof it bef ore tax (146-147)	149	58.423.491	62.786.228	0	48.334.778
2. Loss bef ore tax (147-146)	150	0	0	7.140.355
XII. INCOME TAX EXPENSE	151	22.775.104	20.365.190	25.070.390	21.092.161
XIII. PROFIT OR LOSS FOR THE PERIOD (148-151) 1. Prof it f or the period (149-151)	152 153	35.648.387 35.648.387	42.421.038 42.421.038	-32.210.745	27.242.617 27.242.617
2. Loss f or the period (151-148)	154		0	32.210.745
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	0	0	-31.811.790	27.506.056
2. Attributable to non-controlling interests STATEMENTS OF COMPREHENSIVE INCOME (to be filled by entities who work in compliance with IFRS)	156	0	0	-398.955	-263.440
I. PROFIT OR LOSS FOR THE PERIOD (= 152)	157	35.648.387	42.421.038	-32.210.745	27.242.617
II. OTHER COMPREHENSIVE INCOME /LOSS BEFORE TAX (159 to 165)	158			-4.236.050
1. Exchange dif f erences arising f rom f oreign operations	159			-4.236.050
2. Rev aluation of non-current assets and intangible assets	160
3. Gains or loss av ailable f or sale inv estments 4. Gains or loss on net mov ement on cash f low hedges	161 162
5. Gains or loss on net inv estments hedge	163
6. Share of the other comprehensiv e income/loss of associates	164
7. Acturial gain / loss on post employ ment benef it obligations	165
III. TAX ON OTHER COMPREHENSIVE INCOME OF THE PERIOD	166
IV. NET OTHER COMPREHENSIVE INCOME OR LOSS FOR THE YEAR (158-166)	167			-4.236.050
V. TOTAL COMPREHENSIVE INCOME/LOSS FOR THE PERIOD (157+167)	168	35.648.387	42.421.038	-36.446.795	27.242.617
APPENDIX Statement of Comprehensive Income (to be filled in by entities submitting consolidated financial statements)
VI. TOTAL COMPREHENSIVE INCOME/LOSS FOR THE PERIOD
1. Attributable to owners of the company	169	0	0	-36.107.760	27.506.056
2. Attributable to non-controlling interests	170	0	0	-339.035	-263.440

Name of position:	AOP	Previous period	Current period	Previous period	Current period
1	2	3	4	5	6
			DALEKOVOD jsc		DALEKOVOD GROUP
CASH FLOW FROM OPERATING ACTIVITIES
1. Pre-tax prof it	001	58.423.491	62.786.228	-7.140.355	48.334.778
2. Depreciation	002	33.152.849	33.950.124	50.264.221	50.889.175
3. Increase in short-term liabilities	003	0	113.884.988	111.761.549	105.594.814
4. Decrease in short-term receiv ables	004	0	0	0	0
5. Reduction of stocks	005	0	0	0	28.119.770
6. Other increase in cash f low	006	0	8.746.953	0	21.699.445
I. Total increase in cash flow from operating activities (001 to 006)	007	91.576.340	219.368.293	154.885.415	254.637.982
1. Decrease in short-term liabilities	008	77.661.018	0	0	0
2. Increase in short-term receiv ables	009	59.428.070	109.341.690	178.638.640	107.320.418
3. Increase in stocks	010	10.869.706	2.538.630	26.234.124	0
4. Other decrease in cash f low	011	32.044.259	36.910.220	18.052.996	62.227.375
II Total decrease in cash flow from operating activities (008 to 011)	012	180.003.053	148.790.540	222.925.760	169.547.793
A1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES (007-012)	013	0	70.577.753	0	85.090.189
A2) NET DECREASE IN CASH FLOW FROM OPERATING ACTIVITIES (012-007)	014	88.426.713	0	68.040.345	0
CASH FLOW FROM INVESTMENT ACTIVITIES
1. Cash receipts f rom sale of f ixed tangible and intangible assets	015	1.433.722	1.784.409	259.349	0
2. Cash receipts f rom sale of treasury and debt f inancial instruments	016	0	5.601.069	0	5.735.603
3. Cash receipts f rom interests	017	4.136.547	1.832.788	1.589.402	1.832.788
4. Cash receipts f rom div idends	018	0	12.966.272	0	0
5. Other cash receipts f rom inv estment activ ities	019	4.993.847	11.120.814	447.203	11.235.095
III. Total cash receipts from investment activities (015 to 019)	020	10.564.116	33.305.352	2.295.954	18.803.486
1. Expenditures f or buy ing f ixed assets and intangible assets	021	4.271.751	19.796.135	40.740.144	13.435.077
2. Expenditures f or purchasing treasury and debt f inancial instruments	022	0	43.139	0	464.563
3. Other expenditures f rom inv estment activ ities	023	80.710.388	29.516.847	63.149.779	32.794.583
IV. Total expenditures from investment activities (021 to 023)	024	84.982.139	49.356.121	103.889.923	46.694.224
B1) NET INCREASE IN CASH FLOW FROM INVESTMENT ACTIVITIES (020-024)	025	0	0	0	0
b2) NET DECREASE IN CASH FLOW FROM INVESTMENT ACTIVITIES (024-020)	026	74.418.023	16.050.769	101.593.969	27.890.738
CASH FLOW FROM FINANCIAL ACTIVITIES
1. Cash receipts f rom issuance of treasury and debt f inancial instruments	027	209.389.720	0	209.390.570	0
2. Cash receipts f rom loan principal, bonds, borrowings and other loans	028	0	0	14.253.526	12.991.695
3. Total cash receipts f rom f inancial activ ities	029	4.500.000	0	0	0
V. Total cash receipts from financial activities (027 to 029)	030	213.889.720	0	223.644.096	12.991.695
1. Expenditures f or repay ment of loan principal and bonds	031	5.708.544	0	8.391.679	21.467.727
2. Expenditures f or pay ment of div idends	032	0	0	0	0
3. Expenditures f or f inancial leasing	033	9.120.062	12.241.792	9.299.520	12.241.791
4. Expenditures f or redemption of treasury shares	034	0	0	0	0
5. Other expenditures f rom f inancial activ ities	035	0	1.975.869	0	0
VI. Total expenditures from financial activities (031 to 035)	036	14.828.606	14.217.661	17.691.199	33.709.518
C1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES (030-036)	037	199.061.114	0	205.952.897	0
C2) NET DECREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES (036-030)	038	0	14.217.661	0	20.717.823
Total increase in cash f low (013 – 014 + 025 – 026 + 037 – 038)	039	36.216.378	40.309.323	36.318.583	36.481.629
Total decrease in cash f low (014 – 013 + 026 – 025 + 038 – 037)	040	0	0	0	0
Cash and cash equivalents at the beginning of the period	041	5.546.106	41.762.484	30.068.631	66.387.214
Increase in cash and cash equivalents	042	36.216.378	40.309.323	36.318.583	36.481.629
Decrease in cash and cash equivalents	043	0	0	0	0
Cash and cash equivalents at the end of the period	044	41.762.484	82.071.807	66.387.214	102.868.843

VI. STATEMENT OF CHANGES IN EQUITY (unaudited)

Name of position:	AOP	Previous period	Current period	Previous period	Current period
		DALEKOVOD jsc		DALEKOV OD GROUP
	$\overline{2}$	3	4	5	6
1. Share capital	001	247.193.050	247.193.050	247.193.050	247.193.050
2. Capital reserves	002	86.141.670	86.141.670	86.141.670	86.141.670
3. Reserves from profit	003	44.368.886	44.325.747	74.098.719	82.213.202
4. Retained profit or loss carried forw ard	004	$-159.390.318$	$-123.741.931$	$-116.247.569$	$-156.333.159$
5. Profit or loss of current year	005	35.648.387	42.421.038	$-31.811.790$	27.506.056
6. Revaluation of longterm tangible assets	006	40.014.573	40.014.573	40.014.573	40.014.573
7. Revaluation of intangible assets	007
8. Revaluation of financial assets available for sale	008
9. Other revaluations	009
10. Total equity and reserves (AOP 001 to 009)	010	293.976.248	336.354.147	299.388.653	326.735.393
11. Foreign exchange differences arising from the titles of net	011
12. Current and deferred taxes (part)	012		0	0	0
13. Cash flow protection	013		0		$\Omega$
14. Changes in accounting policies	014		0	0	$\Omega$
15. Correction of significant errors in the previous period	015		0	0	0
16. Other changes in equity	016		0	0	0
17. Total increase or decrease in equity (AOP 011 to 016)	017	$\bf{0}$	0	$\bf{0}$
17 a. Attributed to parent company equity holders	018			299.388.653	326.735.393
17 b. Attributed to minority interest	019			$-647.086$	$-1.215.773$

* IMPORTANT NOTE TO THE MANAGEMENT REPORT:

As an integral part of the Management Report, the financial statements provided below are preliminary, unaudited, unconsolidated statements.

Discrepancies may occur between the preliminary and final financial statements for the Company, which will not significantly affect the Company's business performance.

The Company's annual audited financial statements will be published within the statutory time limit, by 30 April 2016.

VII. NOTES TO FINANCIAL STATEMENTS 1. BASIC DETAILS

MANAGEMENT BOARD

Alen Premužak - Chairman of the Management Board Branimir Alujević - Management Board Member Helena Jurčić Šestan - Management Board Member Marko Jurković - Management Board Member Mirko Leko - Management Board Member

SUPERVISORY BOARD

Marko Lesić - Chairman of the Supervisory Board Ivan Peteržilnik - Deputy Chairman of the Supervisory Board Krešimir Ružđak - Supervisory Board Member Vlado Čović - Supervisory Board Member Hrvoje Markovinović - Supervisory Board Member Uwe Heiland - Supervisory Board Member Marko Makek - Supervisory Board Member Mirela Tomljanović Radović - Supervisory Board Member Anton Pernar - Supervisory Board Member

Dalekovod dioničko društvo za inženjering, proizvodnju i izgradnju

Marijana Čavića 4, 10 000 Zagreb, Hrvatska 10001 Zagreb, P.P. 128 URL: www.dalekovod.hr. www.dalekovod.com E-mail: dalekovod@dalekovod.hr Share capital: HRK 247, 193, 050.00. Number of shares: 24, 719, 305 IBAN: HR8323600001101226102 ZABA Zagreb REG. NO.: (MBS): 080010093, Commercial Court in Zagreb Stat. No.: 3275531 PIN: 47911242222 Activity code: 4222 (Construction of utility projects for electricity and telecommunications)

2. SHAREHOLDINGS (as at 31 December 2015):

Individuals	3,769,002
Financial institutions	4,936,936
Konsolidator d.o.o.	15,000,000
Others	969,433
Own shares	43.934
TOTAL	24,719,305

3. MERGERS AND CONSOLIDATIONS

There were no mergers or consolidations in 4Q 2015.

4. UNCERTAINTY

No items of doubtful and bad debt affecting business continuity were identified in 4Q 2015.

5. DESCRIPTION OF PRODUCTS AND SERVICES

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

• electrical facilities, especially transmission lines between 0.4 and 500 kV
• transformer stations of all levels and voltages up to 500 kV
• · air, underground and underwater cables up to 110 kV
• telecommunication facilities, all types of networks and antennas
• production of suspension and joining equipment for all types of transmission lines and transformer stations between 0.4 and 500 kV
• production and installation of all metal parts for roads, especially for road lighting, security barriers and traffic signals, tunnel lighting and traffic management
• · electrification of railway tracks and tramways

6. CHANGES IN ACCOUNTING POLICIES

There are no new accounting policies.