Dalekovod d.d. — Management Reports 2017

Nov 10, 2017

Zagreb, 31 October 2017

MANAGEMENT REPORT FOR JAN-SEP 2017

Unaudited, consolidated and unconsolidated

Povezujemo svjetove, gradimo budućnost.

TABLE OF CONTENTS:

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

KEY INDICATORS

L

The operating results achieved in the first three quarters of 2017 show continuous recovery and growth in all business segments of Dalekovod d.d. (the "Company") and Dalekovod Group (the "Group") after completion of the financial restructuring.

Group's and Company's financial stability relies on four critical areas: profitable growth and development, costefficiency, stable cash flow and risk management.

Group's focus on revenue growth is reflected in the 24.9% increase in operating revenue compared to the same period in 2016, with sales revenue increasing by 34.1%. This increase in revenue is a result of a significant increase in operating activities compared to the same period last year, both on international markets, in particular Norway and Finland, and on the local market. Foreign revenue obtained in the first three quarters of 2017 accounted for 62.1% of total revenue compared to 62.8% in the same period last year. The entire Dalekovod Group continues to be highly focused on international markets and negotiates new international contracts. This in particular includes a new contract worth EUR 35 million in Norway and a project in Sweden which is especially important because Dalekovod thereby penetrates a new market where it was not present in earlier years.

EBITDA was 39.4% lower than in 2016 - HRK 60.0 million - which is as expected considering the impacts of a one-time items of revenue obtained by selling rights to the Ministry of Finance in Q1 2016 (HRK 50 million) and currency translation gains from operating activities and the first three quarters of 2017 were unaffected by any one-time items. Exclusive of last year's one-time items, EBITDA increased by 22.5%. At the same time, as the best indicator of operating efficiency, gross profit on the Group level increased by HRK 22.1 million.

Net income obtained by the Group in the first three quarters was HRK-14.3 million, which is HRK 30.1 million less than in 2016, also as a result of the one-time revenue items in 2016.

During the same period, Dalekovod d.d. (the "Company") obtained operating revenue of HRK 807.2 million, which is 32.3% more than last year. As is the case with the Group, the Company attained a remarkable increase in sales revenue of 44.7% compared to the same period in 2016.

Company's EBITDA was HRK 59.8 million, which is 32.9% less than the same period last year. As is the case with the Group, it is a result of a one-time item of revenue obtained by selling rights to the Ministry of Finance in Q1 2016 (HRK 50 million) and currency translation gains from operating activities. Without the one-time items in

2016, EBITDA for the first three quarters increased by 53.1% while gross profit, as the most relevant operating indicator, increased by 55.0%. This continues the strong upward trend for operating cash flow.

Net income obtained by the Company in the first three quarters was HRK 18.0 million, which is HRK 62.8 million less than the same period last year - as is the case with other indicators, this is a result of one-time items in the first three quarters of 2017.

For the Management Board

Alen Pfemužak Chairman of the Management Board Dalekovod d.d

DECLARATION

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, Marko Jurković, Management Board Member, Helena Jurčić Šestan, Management Board Member, Ivica Kranjčić, Management Board Member, and Ivan Kurobasa, Management Board Member, hereby make this

DECI ARATION

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 Boards Alen Premužak Chairman of the Manageme Dalekovod d.d.

Traveguarman was buencommon montrena di

BALANCE SHEET (unaudited) $\mathop{\text{III}}\nolimits.$

ASSETS

Name of position:	AOP	Previous year (net)	Current year (net)	Previous year (net)	Current year (net)
		DALEKOVOD is c			DALEKOVOD GROUP
$\mathbf{1}$	$\overline{2}$	3	$\overline{4}$	5	6
ASSETS
A) SUBSCRIBED CAPITAL UNPAID	001	$\mathbf{0}$		$\mathbf{0}$
B) NON CURRENT ASSETS (003+010+020+029+033)	002	729.484.108	714.787.446	519.144.893	507.740.764
I. INTANGIBLE ASSETS (004 to 009)	003 004	9.817.024	7.577.490	14.088.947	11.904.446
1. Research & Development expenditure 2. Patents, licences, roy alties, trade marks, sof tware&similar rights	005	9.000.768	6.761.234	10.400.077	8.010.240
3. Goodwill	006			1.213.000	1.213.000
4. Prepay ments for intangible assets	007	$\mathbf 0$
5. Intangible assets under construction	008	816.256	816.256	2.475.870	2.681.206
6. Other intangible assets	009
II. TANGIBLE ASSETS (011 to 019)	010	367.468.166	345.381.160	449.683.983	427.101.428
1. Land	011	1.157.642		21.792.041	20.602.510
2. Property	012	6.491.873	2.657.412	149.728.949	140.691.057
3. Plants and equipment	013	20.960.778	22.860.765	76.064.955	67.662.332
4. Tools, plants &v ehicles	014	13.468.054	15.929.110	25.372.856	29.192.009
5. Biological asset	015	$\mathbf 0$	$\mathbf 0$
6. Prepay ments for tangible assets	016	$\mathbf{0}$	$\mathbf 0$
7. Assets under construction	017	$\overline{0}$		8.928.218	9.100.064
8. Other tangible assets	018	161.425.158	159.853.457	161.425.158	159.853.456
9. Investments property	019	163.964.661	144.080.416	6.371.806
III. NON-CURRENT FINANCIAL ASSETS (021 to 028)	020	326.699.590	322.941.293	29.677.574	27.216.092
1. Share in related parties	021 022	276.891.774	280.798.810 14.020.454
2. Loans to related parties 3. Participating interests (stakes)	023	18.924.528 8.290.373	8.290.373	2.742.698	2.077.886
4. Loans to participating interest	024
5. Investments in securities	025	4.073.972	1.344.591	4.568.447	1.733.134
6. Loans & deposits	026	18.518.943	18.487.065	22.366.429	23.405.072
7. Other non-current financial assets	027	$\mathbf 0$	0
8. Investment accounted by equity method	028	$\overline{0}$	$\Omega$
IV. TRADE RECEIVABLES (030 to 032)	029	25.499.328	38.887.503	25.694.389	41.518.798
1. Receivables from related parties	030	$\mathbf 0$	$\mathbf 0$
2. Receivables from credit sales	031	$\overline{0}$
3. Other receivables	032	25.499.328	38.887.503	25.694.389	41.518.798
V. DEFERRED TAX ASSETS	033	$\bf{0}$
C) CURENT ASSETS (035+043+050+058)	034	620.960.788	567.255.649	926.739.408	871.976.639
I. INVENTORIES (036 to 042)	035	11.059.440	8.184.725	221.770.291	211.742.514
1. Raw materials & consumables	036	10.347.176	7.309.969	77.210.362	65.281.83
2. Work in progress	037	$\mathbf 0$		30.502.896	18.414.766
3. Products	038	235.023	221.544	41.683.014	53.396.777
4. Merchandise	039	477.241	653.212	6.803.287	8.746.853
5. Prepay ments for inventories	040	$\mathbf 0$ $\overline{0}$	$\mathbf 0$	527.886	859.44
6. Other available-for-sale assets 7. Biological asset	041 042	$\Omega$	$\mathbf 0$	65.042.846	65.042.846
II. RECEIVABLES (044 to 049)	043	460.315.534	458.445.336	533.768.966	550.046.306
	044	37.496.398	23.969.862
1. Heceivables from related parties 2. Trade receivables	045	177.715.374	229.242.595	275.484.785	325.462.726
3. Receivables from participating parties	046	519.386	352.448	1.056.277	417.172
4. Amounts receivable from employees	047	197.497	65.081	221.562	93.222
5. Receivables from government agencies	048	10.334.763	7.907.379	16.176.070	14.170.143
6. Other receivables	049	234.052.116	196.907.971	240.830.272	209.903.043
III. CURRENT FINANCIAL ASSETS (051 to 057)	050	62.736.871	65.300.884	65.772.027	54.335.352
1. Share in related parties	051	$\mathbf 0$
2. Loans to related parties	052	2.207.466	10.352.137
3. Participating interests (stakes)	053	$\mathbf 0$
4. Loans to participating interest	054	$\mathbf 0$
5. Investments in securities	055	30.485.060	30.494.834	30.485.060	30.494.834
6. Loans & deposits	056	30.044.345	24.453.913	35.286.967	23.840.518
7. Other financial assets	057	$\mathbf 0$
IV. CASH ON HAND AND IN THE BANK	058	86.848.943	35.324.704	105.428.124	55.852.467
D) PREPAYMENTS AND ACCRUED INCOME	059	2.271.497	2.849.831	2.608.625	3.330.398
E) TOTAL ASSETS (001+002+034+059)	060		1.352.716.393	1.448.492.926	1.383.047.80
F) OFF-BALANCE SHEET ITEMS	061	669.618.925	538.474.616	793.206.354	598.923.060

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	271.183.667	289.188.614	259.907.516	273.647.853
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	43.675.007	43.675.007	75.581.849	75.010.016
1. Legal reserv es	066	11.486.600	11.486.600	11.652.410	11.652.410
2. Reserv es f or own shares	067	8.465.950	8.465.950	8.465.950	8.465.950
3. Own shares and stakes (less)	068	-8.465.950	-8.465.950	-8.465.950	-8.465.950
4. Statutory reserv es	069	32.188.407	32.188.407	67.117.790	67.117.790
5. Other reserv es	070	0	0	-3.188.351	-3.760.184
IV. REVALUATION RESERVES	071	69.396.583	69.396.583	69.396.583	69.396.583
V. RETAINED EARNINGS OR LOSS BROUGHT FORWARD (073-074)	072	-200.410.664	-175.222.643	-254.479.421	-217.711.128
1. Retained earnings	073		0		0
2. Loss brought f orward	074	200.410.664	175.222.643	254.479.421	217.711.128
VI. PROFIT OR LOSS FOR THE FINANCIAL YEAR (076-077)	075	25.188.021	18.004.947	36.768.293	14.311.102
1. Prof it f or the f inancial y ear	076	25.188.021	18.004.947	36.768.293	14.311.102
2. Loss f or the f inancial y ear	077	0	0		0
VII. MINORITY INTEREST	078	0	0	-694.508	-693.440
B) PROVISIONS (080 to 082)	079	22.654.443	21.636.688	25.855.947	24.817.048
1. Prov isions f or pensions, sev erance pay and similar libabilities	080	4.404.568	4.404.568	7.542.238	7.541.444
2. Prov isions f or tax obligations	081	0	0		0
3. Other prov isions	082	18.249.875	17.232.120	18.313.709	17.275.604
C) NON-CURRENT LIBILITIES (084 to 092)	083	428.509.757	394.851.832	415.647.492	386.276.498
1. Liabilites to related parties	084	13.141.088	10.691.619		0
2. Liabilities f or loans, deposits and other	085	0	0		0
3. Liabilities towards banks and other f inancial institutions	086	347.508.682	324.287.116	347.718.745	326.666.591
4. Amounts pay able f or prepay ment	087	0	0		0
5. Trade pay ables	088	9.742.640	1.368.346	9.811.399	1.105.155
6. Amounts pay able f or securities	089	42.495.986	43.271.355	42.495.987	43.271.356
7. Liabilities toward participating interests	090	387.965	0	387.965	0
8. Other non-current liabilities	091	0	0		0
9. Def f ered tax	092	15.233.396	15.233.396	15.233.396	15.233.396
D) CURRENT LIABILITIES (094 to 105)	093	614.606.694	553.805.243	731.320.138	672.895.853
1. Liabilites to related parties	094	37.787.055	23.083.289		0
2. Liabilities f or loans, deposits and other	095	0	0		0
3. Liabilities towards banks and other f inancial institutions	096	113.854.477	113.896.509	157.023.499	144.959.308
4. Amounts pay able f or prepay ment	097	130.455.505	86.247.798	135.581.042	90.467.911
5. Trade pay ables	098	154.428.383	183.433.804	225.830.671	259.780.687
6. Amounts pay able f or securities	099	60.832.636	58.509.271	60.832.637	58.509.272
7. Liabilities toward participating interests	100	0	169.131	1.153.639	405.991
8. Liabilities to emloy ees	101	25.739.721	34.864.728	48.739.877	57.651.982
9. Taxes, contributions and similar liabilities	102	28.301.085	37.191.974	33.408.724	42.830.256
10. Liabilities arising f rom share in the result	103	100.985	100.985	100.985	120.111
11. Liabilities arising f rom non-current assets held f or sale	104	0	0		0
12. Other current liabilities	105	63.106.847	16.307.754	68.649.064	18.170.335
E) ACCRUED EXPENSES AND DEFERRED INCOME	106	15.761.832	25.410.549	15.761.833	25.410.549
F) TOTAL LIABILITIES (062+079+083+093+106)	107		1.352.716.393 1.284.892.926	1.448.492.926	1.383.047.801
G) OFF-BALANCE SHEET ITEMS	108	669.618.925	538.474.616	793.206.354	598.923.060
ANNEX TO THE BALANCE SHEET (to be filled in by a company preparing the consolidated annual financial statemen
A) CAPITAL AND RESERVES
1. Attributable to equity holders of the parent company 's capital	109			260.602.024	274.341.293
2. Attributable to non-controlling interests	110			-694.508	-693.440

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)	111	610.289.154	807.157.513	844.103.224	1.054.477.141
1. Sales rev enue	112	541.464.609	783.367.735	771.807.280	1.034.880.108
2. Other operating income	113	68.824.545	23.789.778	72.295.944	19.597.033
II. OPERATING EXPENSES (115+116+120+124+125+126+129+130)	114	546.800.843	773.173.065	781.221.708	1.027.112.495
1. Changes in inv entories of f inished products and work in progress	115	30.049	13.479	-12.526.721	475.480
2. Material costs (117 to 119)	116	345.900.932	538.657.316	485.489.237	685.293.214
a) Cost of raw materials & consumables	117	142.574.974	232.809.070	199.938.259	291.459.664
b) Cost of goods sold	118	47.504.208	87.437.083	99.458.691	134.559.175
c) Other costs	119	155.821.750	218.411.163	186.092.287	259.274.375
3. Staf f costs (121 to 123)	120	120.471.343	140.659.447	191.223.410	212.608.744
a) Net salaries	121	90.213.704	109.913.778	133.196.662	154.939.511
b) Employ ee income tax	122	19.338.986	19.221.364	37.629.926	43.125.262
c) Tax on pay roll	123	10.918.653	11.524.305	20.396.822	14.543.971
4. Depreciation and amortisation	124	25.567.997	25.798.420	36.124.775	32.657.849
5. Other expenditures	125	7.727.212	7.867.945	15.346.920	16.172.364
6. Value adjustment (127+128)	126	9.763	102.418	31.914	155.114
a) non-current assets (without f inancial assets)	127	9.763	102.418	31.914	107.076
b) current asssets (without f inancial assets)	128	0	0	0	48.038
7. Prov isions 8. Other operating expenses	129 130	0 47.093.547	0 60.074.040	0 65.532.173	0 79.749.730
III. FINANCIAL INCOME (132 to 136)	131	4.042.577	7.575.739	7.944.841	12.095.032
1. Interest income, f oreign exhange dif f erences, div idends and other
f inancial	132	2.569.159	3.810.447	0	0
income related to subsidiaries
2. Interest income, f oreign exchange dif f erences, div idends and other
f inancial	133	1.473.418	3.718.220	7.950.973	12.047.960
income related to third parties
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	0	47.072	-6.132	47.072
IV. FINANCIAL COSTS (138 to 141)	137	15.888.051	19.397.045	23.330.595	20.098.783
1. Interest, f oreign exchange df if f erences and other expenses related to
subsidiaries	138	946.441	810.815	0	0
2. Interest, f oreign exchange dif f erences and other expenses related to
third parties	139	14.941.610	18.586.230	23.327.830	20.098.783
3. Unrealized loss (expenses) f rom the f inancial assets	140	0	0	0	0
4. Other f inancial expenses	141	0	0	2.765	0
V. SHARE OF INCOME OF ASSOCIATES	142	0	0	617.089	0
VI. SHARE OF LOSS OF ASSOCIATES	143	0	0	0	664.812
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)	146	614.331.731	814.733.252	852.665.154	1.066.572.173
X. TOTAL EXPENSES (114+137+143 + 145)	147	562.688.894	792.570.110	804.552.303	1.047.876.090
XI. PROFIT OR LOSS BEFORE TAX (146-147)	148	51.642.837	22.163.142	48.112.851	18.696.083
1. Prof it bef ore tax (146-147)	149	51.642.837	22.163.142	48.112.851	18.696.083
2. Loss bef ore tax (147-146)	150	0	0	0	0
XII. INCOME TAX EXPENSE	151	3.243.019	4.158.195	3.681.010	4.384.981
XIII. PROFIT OR LOSS FOR THE PERIOD (148-151)	152	48.399.818	18.004.947	44.431.841	14.311.102
1. Prof it f or the period (149-151)	153	48.399.818	18.004.947	44.431.841	14.311.102
2. Loss f or the period (151-148)	154	0	0	0	0
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	44.431.841	14.311.102
2. Attributable to non-controlling interests	156	0	0	0	0
STATEMENTS OF COMPREHENSIVE INCOME (to be filled by entities who work in compliance with IFRS)
I. PROFIT OR LOSS FOR THE PERIOD (= 152)	157	48.399.818	18.004.947	44.431.841	14.311.102
II. OTHER COMPREHENSIVE INCOME /LOSS BEFORE TAX (159 to 165)	158	0	0	-447.689	-570.765
1. Exchange dif f erences arising f rom f oreign operations	159	0	0	-447.689	-570.765
2. Rev aluation of non-current assets and intangible assets	160	0	0	0	0
3. Gains or loss av ailable f or sale inv estments	161	0	0	0	0
4. Gains or loss on net mov ement on cash f low hedges	162	0	0	0	0
5. Gains or loss on net inv estments hedge	163	0	0	0	0
6. Share of the other comprehensiv e income/loss of associates	164	0	0	0	0
7. Acturial gain / loss on post employ ment benef it obligations	165	0	0	0	0
III. TAX ON OTHER COMPREHENSIVE INCOME OF THE PERIOD	166	0	0	0	0
IV. NET OTHER COMPREHENSIVE INCOME OR LOSS FOR THE YEAR
(158-166)	167	0	0	-447.689	-570.765
V. TOTAL COMPREHENSIVE INCOME/LOSS FOR THE PERIOD
(157+167)	168	48.399.818	18.004.947	43.984.152	13.740.337
APPENDIX Statement of Comprehensive Income (to be filled in by entities submitting consolidated financial statemen
VI. TOTAL COMPREHENSIVE INCOME/LOSS FOR THE PERIOD
1. Attributable to owners of the company 2. Attributable to non-controlling interests	169 170	0 0	0 0	43.986.394 -2.242	13.739.269 1.068

V. CASH FLOW STATEMENT (unaudited)

Name of position:	AOP	Previous period	Current period	Previous period	Current period
1	2 1	3	$\overline{4}$	5 5	6
		DALEKOVOD jsc			DALEKOVOD GROUP
CASH FLOW FROM OPERATING ACTIVITIES
1. Pre-tax profit	001	51.642.837	22.163.142	48.112.851	18.696.083
2. Depreciation	002	25.567.997	25.798.420	36.124.775	32.657.849
3. Increase in short-term liabilities	003		14.470.786		33.202.368
4. Decrease in short-term receivables	004	107.486.164	$\Omega$	99.419.869	$\mathbf 0$
5. Reduction of stocks	005	10.311.949	2.874.715		10.027.777
6. Other increase in cash flow	006	$\Omega$	$\Omega$		$\Omega$
I. Total increase in cash flow from operating activities (001 to 006)	007	195.008.947	65.307.063	183.657.494	94.584.077
1. Decrease in short-term liabilities	008	76.176.303		59.446.693	$\mathbf{0}$
2. Increase in short-term receivables	009	$\Omega$	37.833.747		49.338.836
3. Increase in stocks	010	$\overline{0}$	$\Omega$	8.178.523	$\Omega$
4. Other decrease in cash flow	011	53.720.117	47.079.316	77.083.739	55.251.666
Il Total decrease in cash flow from operating activities (008 to 011)	012	129.896.420	84.913.063	144.708.955	104.590.502
A1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES	013	65.112.527	$\mathbf{0}$	38.948.539	$\bf{0}$
A2) NET DECREASE IN CASH FLOW FROM OPERATING ACTIVITIES	014	$\overline{0}$	19.606.000	$\bf{0}$	10.006.425
CASH FLOW FROM INVESTMENT ACTIVITIES
1. Cash receipts from sale of fixed tangible and intangible assets	015	0	2.855.490	6.828.113	3.825.736
2. Cash receipts from sale of treasury and debt financial instruments	016	$\overline{0}$		$\overline{0}$	$\mathbf 0$
3. Cash receipts from interests	017	$\mathbf{0}$	744.055	$\overline{0}$	646.868
4. Cash receipts from dividends	018	$\Omega$	3.785.927	$\Omega$	$\mathbf 0$
5. Other cash receipts from investment activities	019	378.507	7.608.307	411.449	11.062.844
III. Total cash receipts from investment activities (015 to 019)	020	378.507	14.993.779	7.239.561	15.535.448
1. Expenditures for buying fixed assets and intangible assets	021	8.399.789	13.061.268	23.929.926	16.276.133
2. Expenditures for purchasing treasury and debt financial instruments	022	869.411	$\mathbf 0$	$\overline{0}$	$\mathbf 0$
3. Other expenditures from investment activities	023	35.090.703	9.484.810	16.282.895	$\mathbf{0}$
IV. Total expenditures from investment activities (021 to 023)	024	44.359.903	22.546.078	40.212.821	16.276.133
B1) NET INCREASE IN CASH FLOW FROM INVESTMENT ACTIVITIES	025	$\mathbf{0}$		$\Omega$	$\bf{0}$
b2) NET DECREASE IN CASH FLOW FROM INVESTMENT ACTIVITIES	026	43.981.396	7.552.299	32.973.260	740.685
CASH FLOW FROM FINANCIAL ACTIVITIES
1. Cash receipts from issuance of treasury and debt financial	027	$\Omega$	$\Omega$	$\Omega$	$\mathbf 0$
2. Cash receipts from loan principal, bonds, borrowings and other loans	028	$\mathbf{0}$	3.600.000	44.673.374	$\mathbf 0$
3. Total cash receipts from financial activities	029	0			$\mathbf 0$
V. Total cash receipts from financial activities (027 to 029)	030	$\mathbf{0}$	3.600.000	44.673.374	$\mathbf{0}$
1. Expenditures for repayment of loan principal and bonds	031	$\mathbf{0}$	14.526.180	30.059.134	24.973.393
2. Expenditures for payment of dividends	032	$\mathbf{0}$	$\Omega$	$\Omega$	$\mathbf 0$
3. Expenditures for financial leasing	033	10.377.787	11.891.764	10.512.680	12.307.158
4. Expenditures for redemption of treasury shares	034	649.740	$\Omega$	649.740	$\mathbf 0$
5. Other expenditures from financial activities	035	39.903.126	1.547.996	39.903.126	1.547.996
VI. Total expenditures from financial activities (031 to 035)	036	50.930.653	27.965.940	81.124.679	38.828.547
C1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES	037				$\mathbf{0}$
C2) NET DECREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES	038	50.930.653	24.365.940	36.451.305	38.828.547
Total increase in cash flow $(013 - 014 + 025 - 026 + 037 - 038)$	039				$\Omega$
Total decrease in cash flow $(014 - 013 + 026 - 025 + 038 - 037)$	040	29.799.522	51.524.239	30.476.026	49.575.657
Cash and cash equivalents at the beginning of the period	041	81.849.024	86.848.943	102.077.241	105.428.124
Increase in cash and cash equivalents	042				$\mathbf{0}$
Decrease in cash and cash equivalents	043	29.799.522	51.524.239	30.476.026	49.575.657
Cash and cash equivalents at the end of the period	044	52.049.502	35.324.704	71.601.215	55.852.467

Name of position:	AOP	Previous period	Current period	Previous period	Current period
			DALEKOVOD jsc		DALEKOVOD GROUP
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	43.675.007	43.675.007	75.581.849	75.010.016
4. Retained profit or loss carried forw ard	004	-200.410.664	-175.222.643	-255.173.929	-218.404.568
5. Profit or loss of current year	005	25.188.021	18.004.947	36.768.293	14.311.102
6. Revaluation of longterm tangible assets	006	69.396.583	69.396.583	69.396.583	69.396.583
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	271.183.667	289.188.614	259.907.516	273.647.853
11. Foreign exchange differences arising from the titles of net	011			-71.160	-570.765
investment in foreign operations 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			37.812.521	14.312.170
17. Total increase or decrease in equity (AOP 011 to 016)	017			37.741.361	13.741.405
17 a. Attributed to parent company equity holders	018			37.739.999	13.740.337
17 b. Attributed to minority interest	019			1.362	1.068

NOTES TO FINANCIAL STATEMENTS VII 1. GENERAL DETAILS

MANAGEMENT BOARD

Alen Premužak - Chairman of the Management Board Marko Jurković - Management Board Member Helena Jurčić Šestan - Management Board Member Ivica Kranjčić - Management Board Member Ivan Kurobasa - 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 Milan Račić - Supervisory Board Member Marko Makek - Supervisory Board Member Mirela Tomljanović Radović - Supervisory Board Member Rajko Pavelić - Supervisory Board Member

Dalekovod dioničko društvo za inženjering, proizvodnju i izgradnju

Marijana Čavića 4, 10 000 Zagreb, Croatia 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 30 September 2017):

Konsolidator d.o.o.	15,000,000
Individuals	4,519,043
Financial institutions	4,170,952
Others	930,469
Own shares	98,841
TOTAL	24,719,305

1. MERGERS AND CONSOLIDATIONS

There were no mergers or consolidations in the first 9 months of 2017.

2. UNCERTAINTY

No items of doubtful and bad debt affecting business continuity were identified in in the first 9 months of 2017.

3. 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

4. CHANGES IN ACCOUNTING POLICIES

There are no new accounting policies.