Dalekovod d.d. — Management Reports 2018

Nov 9, 2018

Zagreb, 30 October 2018

MANAGEMENT REPORT

FOR I - IX 2018

Unaudited, consolidated and unconsolidated

Povezujemo svjetove, gradimo budućnost.

CONTENTS:

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

MANAGEMENT BOARD'S REPORT

Γ.

In the first nine months of 2018, the total business income of Dalekovod d.d. amounts to 702.2 million HRK, which represents a decline of 13% in comparison to the same period in 2017. This decline is the result of a decrease in business activities in comparison to the same period in 2017, both in foreign and domestic markets. The cyclical nature of the industry in which all Dalekovod Grupa companies compete was emphasized in the current year. It is important to note that the sales activities have been significantly intensified in the last 18 months. The amount of contracted jobs for 2019 is better than it was at the end of 2017, which is the best indicator of future activity. A larger number of tenders are also being prepared in comparison to previous periods, which is also reassuring in the view that this was an isolated year of reduced activities and financial results.

EBIDTA on the Company's level in the first nine months of 2018 is 74.4 million HRK lower in comparison to the same period last year. The decline in EBITDA in comparison to the first nine months in 2017 is mostly caused by the lower gross margin that decreased by 74.6 million HRK due to reduced business activities. The net loss in the first nine months for Dalekovod d.d. amounts to 35 million HRK, and this result is reduced in comparison to the same period last year by 53 million HRK.

In 2018, Dalekovod d.d. continued to fulfil its obligations resulting from financial restructuring, same as in previous years. The creditors were paid 29 million HRK in 2018, and cumulatively from 2014 to 2018, Dalekovod d.d. paid its creditors 351 million HRK, which strengthens the trust and builds stronger relationship with partners. By paying the instalment of 31 March, Dalekovod fulfilled all obligations resulting from the pre-bankruptcy settlement towards its suppliers, and is left with an obligation towards financial institutions, which significantly reduces the burden related to the prebankruptcy settlement in the following period. The average annual payment amount according to the restructuring plan between 2014 and 2017 was 80 million HRK, while in the period from 2018 to 2021, this amount is reduced to 45 million HRK.

The Company's management actively works on selling the wind park owned by the company and on the project of refinancing the current remaining debt. These activities would result in significant improvement of the balance sheet and cash flow, which would enable the company's investment in future development. In the previous period, due to pre-settlement bankruptcy dynamics, all financial assets generated from business activities were used to settle obligations, meaning the company could not invest larger assets in development; therefore, the company was not able to realize its full market potential.

The consolidated Group trends are similar to trends for Dalekovod d.d., which is the most important member of the Group. In the first nine months of 2018, the total business income of Dalekovod grupa

amounts to 915.9 million HRK, which represents a decline of 13% in comparison to the same period in 2017. The consolidated EBITDA was reduced by 73 million HRK in comparison to the same period last year.

The group plans to continue with its internationalization and income growth from sales in foreign markets, with its primary focus on Scandinavian (Norway, Finland, Sweden), regional (Slovenia, Bosnia and Herzegovina, Macedonia, Montenegro) and middle and eastern European markets (Poland, Ukraine, Georgia). A special emphasis will be put on the German market where Dalekovod successfully pre-qualified for transmission network works with the biggest German transmission systems operator. A perennial trend of continuous investment in restoring and expanding energy infrastructure is present in the above-mentioned markets, which represents a potential for a longterm presence of the Group in executions of projects, provided that the Group is well positioned.

The strategic quidelines for Dalekovod for the following period are:

• Focus on income growth:
• Focus on the efficiency of project execution and increase in gross margin;
• Strong orientation towards contracting new jobs in foreign and domestic markets;
• Personnel empowerment on all levels, improvement of leadership skills and building of a supportive corporate culture

On behalf of the Management Board:

Alen Premuzak Chairman of the Management Board Dalekovod d.d.

Pursuant to Article 410 Paragraph 1 and Article 407 Paragraph 2 Subparagraph 3 and Paragraph 3 of the Capital Market Act, the authorized persons for drawing up the report: Alen Premužak -Chairman of the Board, Helena Jurčić Šestan - member of the Board, Ivica Kranjčić - member of the Board, and Ivan Kurobasa - member of the Board, issue the following

DECLARATION

According to our best knowledge, the financial Reports for the reporting period were drawn up in compliance with the appropriate financial reporting standards; they provide a complete and honest representation of assets and obligations, and the result of Dalekovod's business activities, as well as of other companies included in the consolidation, with a brief overview of the causes for data provided. Financial reports are not revised.

On behalf of the Management Board:

Alen Prémužak Charman of the Management Board Dalekovod d.d.

III. BALANCE SHEET (unaudited)

Name of position:	AOP	Previous year (net)	Current year (net)	Previous year (net)	Current year (net)
		DALEKOVOD jsc		DALEKOVOD GROUP
$\mathbf{1}$	$\overline{2}$	3	$\overline{4}$	$\overline{5}$	6
ASSETS
A) SUBSCRIBED CAPITAL UNPAD	001	$\overline{0}$		$\overline{0}$
B) NON CURRENT ASSETS (003+010+020+029+033)	002	700.223.851	702.756.415	501.798.770	498.727.913
I. INTANGIBLE ASSETS (004 to 009)	003 004	6.785.437	9.501.551	11.003.454	13.613.767
1. Research & Development expenditure 2. Patents, licences, roy alties, trade marks, software&similar rights	005	$\mathbf{0}$ 5.969.181	8.685.295	7.211.209	9.811.172
3. Goodwill	006	$\Omega$		1.213.000	1.213.000
4. Prepay ments for intangible assets	007	$\Omega$
5. Intangible assets under construction	008	816.256	816.256	2.579.245	2.589.595
6. Other intangible assets	009	$\Omega$
II. TANGIBLE ASSETS (011 to 019)	010	337.167.501	341.154.529	416.536.361	415.931.810
1. Land	011	$\Omega$		20.612.199	20.564.088
2. Property	012	803.874	1.177.720	136.337.822	130.082.066
3. Plants and equipment	013	21.551.028	34.714.307	62.259.604	66.241.802
4. Tools, plants & v ehicles	014	15.411.168	19.863.314	28.243.137	32.265.063
5. Biological asset	015	$\Omega$		0
6. Prepay ments for tangible assets	016	$\mathbf{0}$	0	$\mathbf{0}$
7. Assets under construction	017	$\Omega$		9.255.438	8.992.862
8. Other tangible assets	018	159.336.759	157.785.929	159.339.759	157.785.929
9. Investments property	019	140.064.672	127.613.259	488.401
III. NON-CURRENT FINANCIAL ASSETS (021 to 028)	020	308.301.783	323.603.551	26.165.296	40.550.469
1. Share in related parties 2. Loans to related parties	021 022	280.798.810 7.127.296	280.770.961 6.757.743	$\mathbf 0$ $\Omega$	$\overline{\mathbf{C}}$
3. Participating interests (stakes)	023	7.000	4.000	7.000	4.000
4. Loans to participating interest	024	$\Omega$	$\Omega$	$\Omega$
5. Investments in securities	025	1.343.025		1.599.335	4.984
6. Loans & deposits	026	19.025.652	18.834.304	24.558.961	23.304.942
7. Other non-current financial assets	027	$\mathbf 0$		$\mathbf{0}$
8. Investment accounted by equity method	028	$\Omega$	17.236.543	$\mathbf{0}$	17.236.543
IV. TRADE RECEIVABLES (030 to 032)	029	47.969.130	28.496.784	48.093.659	28.631.866
1. Receivables from related parties	030	$\mathbf{0}$		$\mathbf{0}$	177.456
2. Receivables from credit sales	031	$\mathbf{0}$		$\mathbf{0}$
3. Other receivables	032	47.969.130	28.496.784	48.093.659	28.454.410
V. DEFERRED TAX ASSETS	033	$\mathbf{0}$
C) CURENT ASSETS (035+043+050+058)	034	572.126.184	486.407.016	812.072.394	732.040.018
I. INVENTORIES (036 to 042)	035	8.240.766	8.277.973	160.596.439	169.083.489
1. Raw materials & consumables	036	6.501.169	6.924.237	54.779.952	62.880.031
2. Work in progress	037 038	$\Omega$	47.755	10.160.871	16.665.498
3. Products 4. Merchandise	039	217.672 1.521.925	1.305.981	22.833.919 7.530.187	16.815.061 6.976.789
	040		0	254.133	708.732
5. Prepay ments for inventories 6. Other av ailable-for-sale assets	041	U $\mathbf{0}$	$\mathbf 0$	65.037.377	65.037.377
7. Biological asset	042			0
II. RECEIVABLES (044 to 049)	043	442.694.650	342.115.973	516.521.124	425.668.388
1. Receivables from related parties	044	30.070.234	28.999.083	$\mathbf 0$
2. Trade receivables	045	217.276.741	170.824.233	313.008.406	245.758.518
3. Receivables from participating parties	046	0		$\Omega$
4. Amounts receivable from employees	047	5.078	62.423	23.685	166.133
5. Receivables from government agencies	048	9.667.482	7.203.878	14.342.466	14.549.360
6. Other receivables	049	185.675.115	135.026.356	189.146.566	165.194.377
III. CURRENT FINANCIAL ASSETS (051 to 057)	050	31.841.696	42.120.391	27.576.440	29.532.047
1. Share in related parties	051	0		$\mathbf 0$	0
2. Loans to related parties	052	8.716.833	14.382.734	$\overline{0}$	0
3. Participating interests (stakes)	053	$\mathbf 0$	$\mathbf 0$	$\mathbf 0$	$\overline{\mathcal{C}}$
4. Loans to participating interest	054	$\Omega$	$\mathbf 0$	$\Omega$	0
5. Investments in securities	055 056	496.950 22.627.913	0 27.737.657	496.950 27.079.490	29.532.047
6. Loans & deposits 7. Other financial assets	057	$\mathbf 0$		$\mathbf 0$
IV. CASH ON HAND AND IN THE BANK	058	89.349.072	93.892.679	107.378.391	107.756.093
D) PREPAYMENTS AND ACCRUED INCOME	059	2.583.322	15.469.772	3.104.509	15.855.375
E) TOTAL ASSETS (001+002+034+059)	060	1.274.933.357	1.204.633.203	1.316.975.674	1.246.623.306
F) OFF-BALANCE SHEET ITEMS	061	609.258.038	568.944.421	663.985.533	568.944.421

Name of position:	AOP	Previous year (net)	Current year (net)	Previous year (net)	Current year (net)
		DALEKOVOD jsc		DALEKOVOD GROUP
1	$\overline{2}$	$\overline{3}$	$\overline{4}$	5	6
EQUITY AND LIABILITIES
A) CAPITAL AND RESERVES (063+064+065+071+072+075+078)	062	294.573.083	260.373.929	236.301.140	189.020.134
I. SHARE CAPITAL	063	247.193.050	247.193.050	247.193.050	247.193.050
II. CAPITAL RESERVES	064	87.214.738	87.974.191	87.214.738	87.974.191
III. RESERVES FROM PROFIT (066+067-068+069+070)	065	43.675.007	43.675.007	74.860.772	76.437.164
1. Legal reserves	066	11.486.600	11.486.600	11.652.410	11.652.410
2. Reserves for 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 reserves	069	32.188.407	32.188.407	67.117.790	67.117.790
5. Other reserves	070	0	$\Omega$	$-3.909.428$	$-2.333.036$
IV. REVALUATION RESERVES	071	69.402.489	69.402.489	69.402.489	69.402.489
V. RETAINED EARNINGS OR LOSS BROUGHT FORWARD (073-074)	072	$-175.222.643$	$-152.912.201$	$-254.040.325$	-245.756.266
1. Retained earnings	073	$\mathbf{0}$	$\Omega$	$\Omega$
2. Loss brought forward	074	175.222.643	152.912.201	254.040.325	245.756.266
VI. PROFIT OR LOSS FOR THE FINANCIAL YEAR (076-077)	075	22.310.442	$-34.958.607$	12.364.147	$-45.538.341$
1. Profit for the financial year	076	22.310.442	$\Omega$	12.364.147
2. Loss for the financial year	077	0	34.958.607	$\Omega$	45.538.341
VII. MINORITY INTEREST	078	$\overline{0}$	$\Omega$	$-693.731$	$-692.154$
B) PROVISIONS (080 to 082)	079	21.805.338	21.451.691	25.135.246	24.630.190
1. Provisions for pensions, severance pay and similar libabilities	080	3.154.198	2.975.487	6.418.406	6.088.806
2. Provisions for tax obligations	081	$\mathbf{0}$	$\Omega$	$\Omega$
3. Other provisions	082	18.651.140	18.476.204	18.716.840	18.541.384
C) NON-CURRENT LIBILITIES (084 to 092)	083	385.196.802	381.610.018	371.535.796	373.377.916
1. Liabilites to related parties	084	10.352.893	10.119.996	$\mathbf{0}$
2. Liabilities for loans, deposits and other	085	$\mathbf{0}$	$\Omega$	$\Omega$
3. Liabilities towards banks and other financial institutions	086	315.901.100	293.793.108	312.524.631	295.435.705
4. Amounts pay able for prepay ment	087	$\mathbf{0}$	O	$\Omega$
5. Trade pay ables	088	1.368.346	1.026.259	1.436.702	1.097.205
6. Amounts pay able for securities	089	42.339.770	41.951.933	42.339.771	41.951.934
7. Liabilities toward participating interests	090	0	0	$\Omega$
8. Other non-current liabilities	091	$\overline{0}$	0	$\Omega$
9. Deffered tax	092	15.234.693	34.718.722	15.234.693	34.893.072
D) CURRENT LIABILITIES (094 to 105)	093	560.049.768	534.116.278	670.695.124	652.513.777
1. Liabilites to related parties	094	17.988.054	21.933.301	$\overline{0}$
2. Liabilities for loans, deposits and other	095	$\Omega$	O	$\Omega$
3. Liabilities towards banks and other financial institutions	096	114.921.873	122.759.849	151.030.116	151.334.859
4. Amounts pay able for prepay ment	097	65.434.782	32.866.937	70.871.547	38.988.777
5. Trade pay ables	098	216.931.837	212.343.048	277.140.562	286.383.377
6. Amounts pay able for securities	099	60.346.066	60.161.731	59.669.539	59.711.070
7. Liabilities toward participating interests	100	19.209	19.209	19.209	$\bf{0}$
8. Liabilities to emloyees	101	32.487.397	34.698.258	54.717.065	54.943.912
9. Taxes, contributions and similar liabilities	102	35.189.353	26.493.505	40.568.227	31.738.456
10. Liabilities arising from share in the result	103	100.985	100.985	100.985	100.985
11. Liabilities arising from non-current assets held for sale	104	0	$\mathbf{0}$	$\overline{0}$
12. Other current liabilities	105	16.630.212	22.739.455	16.577.875	29.312.341
E) ACCRUED EXPENSES AND DEFERRED INCOME	106	13.308.366	7.081.287	13.308.368	7.081.289
F) TOTAL LIABILITIES (062+079+083+093+106)	107	1.274.933.357	1.204.633.203	1.316.975.674	1.246.623.306
G) OFF-BALANCE SHEET ITEMS	108	609.258.038	568.944.421	663.985.533	568.944.421
ANNEX TO THE BALANCE SHEET (to be filled in by a company preparing the consolidated annual financial stateme
A) CAPITAL AND RESERVES
1. Attributable to equity holders of the parent company's capital	109	0	$\mathbf{0}$	236.994.871	189.712.288
2. Attributable to non-controlling interests	110	0	$\mathbf{0}$	$-693.731$	$-692.154$

IV. STATEMENT OF COMPREHENSIVE INCOME (unaudited)

Name of position	AOP	Previous period	Current period	Previous period	Current period
1	$\overline{2}$	3	$\overline{4}$	5	6
		DALEKOVOD J.S.C.		DALEKOVOD GROUP
. OPERATING INCOME (112+113) 1. Sales revenue	111 112	807.157.513 783.367.735	702.225.624 673.087.961	1.054.477.141 1.034.880.108	915.884.163 882.050.999
2. Other operating income	113	23.789.778	29.137.663	19.597.033	33.833.164
II. OPERATING EXPENSES (115+116+120+124+125+126+129+130)	114	773.173.065	742.641.315	1.027.112.495	961.911.664
1. Changes in inventories of finished products and work in progress	115	13.479	21.168	475.480	$-1.927.422$
2. Material costs (117 to 119)	116	538.657.316	461.515.592	685.293.214	582.817.956
a) Cost of raw materials & consumables	117	232.809.070	187.335.766	291.459.664	240.615.389
b) Cost of goods sold c) Other costs	118 119	87.437.083 218.411.163	60.292.797 213.887.029	134.559.175 259.274.375	84.381.203 257.821.363
3. Staff costs (121 to 123)	120	140.659.447	163.186.359	212.608.744	230.289.022
a) Net salaries	121	109.913.778	130.868.318	154.939.511	172.889.683
b) Employ ee income tax	122	19.221.364	20.070.441	43.125.262	36.032.879
c) Tax on pay roll	123	11.524.305	12.247.600	14.543.971	21.366.460
4. Depreciation and amortisation	124	25.798.420	25.779.093	32.657.849	32.918.698
5. Other expenditures	125	7.867.945	12.068.470	16.172.364	24.240.450
6. Value adjustment (127+128)	126	102.418	0	155.114	$\mathbf 0$
a) non-current assets (without financial assets) b) current asssets (without financial assets)	127 128	102.418 $\mathbf 0$	$\mathbf 0$ $\overline{0}$	107.076 48.038	$\mathbf 0$ $\mathbf 0$
7. Provisions	129	$\mathbf 0$	$\overline{0}$		16.376
8. Other operating expenses	130	60.074.040	80.070.633	79.749.730	93.556.585
III. FINANCIAL INCOME (132 to 136)	131	7.575.739	24.832.432	8.595.032	20.456.162
1. Interest income, foreign exhange differences, dividends and other
financial	132	3.810.447	15.098.966	$\mathbf 0$	$\mathbf 0$
income related to subsidiaries
2. Interest income, foreign exchange differences, dividends and other financial	133	3.718.220	9.730.530	8.547.960	20.453.226
income related to third parties
3. Part of income from associates and participating interests	134	$\mathbf 0$	$\mathbf 0$	$\mathbf 0$	$\mathbf 0$
4. Unrealized gains (income) from the financial assets	135 136	$\mathbf{0}$ 47.072	$\mathbf 0$ 2.936	$\Omega$ 47.072	$\mathbf{0}$ 2.936
5. Other financial income IV. FINANCIAL COSTS (138 to 141)	137	19.397.045	19.375.348	20.098.783	19.764.959
1. Interest, foreign exchange df if ferences and other expenses related to
subsidiaries	138	810.815	575.613	$\mathbf 0$	$\mathbf 0$
2. Interest, foreign exchange differences and other expenses related to third parties	139	18.586.230	18.776.240	20.098.783	19.764.959
3. Unrealized loss (expenses) from the financial assets	140	$\mathbf 0$	$\mathbf 0$	$\mathbf 0$	0
4. Other financial expenses	141	$\mathbf{0}$	23.495	$\Omega$	$\pmb{0}$
V. SHARE OF INCOME OF ASSOCIATES	142	$\mathbf{0}$	$\bf{0}$	$\mathbf{0}$	$\pmb{0}$
VI. SHARE OF LOSS OF ASSOCIATES	143	$\mathbf{0}$	$\bf{0}$	664.812	$\pmb{\mathsf{0}}$
VII. EXTRAORDINARY - OTHER INCOME	144	$\mathbf{0}$	$\bf{0}$	$\bf{0}$	$\bf{0}$
VIII. EXTRAORDINARY - OTHER EXPENSES IX. TOTAL INCOME (111+131+142 + 144)	145 146	$\mathbf{0}$ 814.733.252	$\overline{0}$ 727.058.056	$\mathbf{0}$ 1.063.072.173	$\mathbf{0}$ 936.340.326
X. TOTAL EXPENSES (114+137+143 + 145)	147	792.570.110	762.016.663	1.047.876.090	981.676.623
XI. PROFIT OR LOSS BEFORE TAX (146-147)	148	22.163.142	-34.958.607	15.196.083	-45.336.298
1. Prof it before tax (146-147)	149	22.163.142	$\mathbf 0$	15.196.083
2. Loss before tax (147-146)	150		34.958.607		45.336.298
XII. INCOME TAX EXPENSE	151	4.158.195		4.384.981	202.043
XIII. PROFIT OR LOSS FOR THE PERIOD (148-151)	152	18.004.947	$-34.958.607$	10.811.102	$-45.538.341$
1. Profit for the period (149-151)	153 154	18.004.947	$\mathbf 0$	10.811.102 n
2. Loss for the period (151-148) ANNEX TO THE PROFIT AND LOSS ACCOUNT (to be filled in by entities submitting consolidated financial statements)		$\mathbf 0$	34.958.607		45.538.341
XIV. PROFIT OR LOSS FOR THE PERIOD
1. Attributable to owners of the company	155	$\mathbf 0$	0	10.811.102	$-45.538.341$
2. Attributable to non-controlling interests	156	$\mathbf 0$	$\mathbf 0$	$\Omega$
STATEMENTS OF COMPREHENSIVE INCOME (to be filled by entities who work in compliance with IFRS)
I. PROFIT OR LOSS FOR THE PERIOD (= 152)	157	18.004.947	$-34.958.607$	10.811.102	$-45.538.341$
II. OTHER COMPREHENSIVE INCOME / LOSS BEFORE TAX (159 to 165)	158	$\mathbf 0$	0	$-570.765$	1.822.697
1. Exchange differences arising from foreign operations	159	$\mathbf 0$	$\overline{0}$	$-570.765$	1.822.697
2. Revaluation of non-current assets and intangible assets	160	$\mathbf 0$	$\mathbf 0$		0
3. Gains or loss available for sale investments	161	$\mathbf 0$	$\pmb{0}$	$\mathbf 0$	$\pmb{0}$
4. Gains or loss on net movement on cash flow hedges	162	$\pmb{0}$	0	$\mathbf 0$	0
5. Gains or loss on net investments hedge	163	$\mathbf 0$	$\pmb{0}$	$\mathbf 0$	$\pmb{0}$
6. Share of the other comprehensive income/loss of associates	164 165	$\mathbf 0$ $\mathbf 0$	0 0	0 0	0 $\overline{0}$
7. Acturial gain / loss on post employment benefit obligations III. TAX ON OTHER COMPREHENSIVE INCOME OF THE PERIOD	166	$\mathbf 0$	0	$\mathbf 0$	$\mathbf 0$
IV. NET OTHER COMPREHENSIVE INCOME OR LOSS FOR THE YEAR	167	$\mathbf 0$	0	$-570.765$	1.822.697
$(158-166)$ V. TOTAL COMPREHENSIVE INCOME/LOSS FOR THE PERIOD	168	18.004.947	$-34.958.607$	10.240.337	$-43.715.644$
$(157+167)$
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	169	$\mathbf 0$	$\mathbf 0$	10.239.269	$-43.717.221$
2. Attributable to non-controlling interests	170	$\mathbf 0$	0	1.068	1.577

8

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	22.163.142	-34.958.607	18.696.083	-45.538.341
2. Depreciation	002	25.798.420	25.779.093	32.657.849	32.918.698
3. Increase in short-term liabilities	003	14.470.786	0	33.202.368	0
4. Decrease in short-term receiv ables	004	0	47.523.659	0	90.852.736
5. Reduction of stocks	005	2.874.715	0	10.027.777	0
6. Other increase in cash f low	006	0	12.372.591	0	21.544.132
I. Total increase in cash flow from operating activities (001 to 006)	007	65.307.063	50.716.736	94.584.077	99.777.225
1. Decrease in short-term liabilities	008	0	643.542	0	0
2. Increase in short-term receiv ables	009	37.833.747	0	49.338.836	0
3. Increase in stocks	010	0	37.207	0	8.487.050
4. Other decrease in cash f low	011	47.079.316	0	55.251.666	39.753.286
II Total decrease in cash flow from operating activities (008 to 011)	012	84.913.063	680.749	104.590.502	48.240.336
A1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES	013	0	50.035.987	0	51.536.889
A2) NET DECREASE IN CASH FLOW FROM OPERATING ACTIVITIES	014	19.606.000	0	10.006.425	0
CASH FLOW FROM INVESTMENT ACTIVITIES
1. Cash receipts f rom sale of f ixed tangible and intangible assets	015	2.855.490	317.622	3.825.736	427.506
2. Cash receipts f rom sale of treasury and debt f inancial instruments	016	0	100.000	0	100.000
3. Cash receipts f rom interests	017	744.055	2.021.978	646.868	2.083.807
4. Cash receipts f rom div idends	018	3.785.927	4.907.027	0	0
5. Other cash receipts f rom inv estment activ ities	019	7.608.307	1.314.653	11.062.844	0
III. Total cash receipts from investment activities (015 to 019)	020	14.993.779	8.661.280	15.535.448	2.611.313
1. Expenditures f or buy ing f ixed assets and intangible assets	021	13.061.268	32.482.235	16.276.133	34.072.071
2. Expenditures f or purchasing treasury and debt f inancial instruments	022	0	0	0	0
3. Other expenditures f rom inv estment activ ities	023	9.484.810	7.738.558	0	2.567.940
IV. Total expenditures from investment activities (021 to 023)	024	22.546.078	40.220.793	16.276.133	36.640.011
B1) NET INCREASE IN CASH FLOW FROM INVESTMENT ACTIVITIES	025	0	0	0	0
b2) NET DECREASE IN CASH FLOW FROM INVESTMENT ACTIVITIES	026	7.552.299	31.559.513	740.685	34.028.698
CASH FLOW FROM FINANCIAL ACTIVITIES
1. Cash receipts f rom issuance of treasury and debt f inancial	027	0	0	0	0
2. Cash receipts f rom loan principal, bonds, borrowings and other loans	028	3.600.000	8.915.781	0	14.878.850
3. Total cash receipts f rom f inancial activ ities	029	0	0	0	8.442.600
V. Total cash receipts from financial activities (027 to 029)	030	3.600.000	8.915.781	0	23.321.450
1. Expenditures f or repay ment of loan principal and bonds	031	14.526.180	11.191.961	24.973.393	28.182.513
2. Expenditures f or pay ment of div idends	032	0	0	0	0
3. Expenditures f or f inancial leasing	033	11.891.764	11.656.687	12.307.158	11.930.268
4. Expenditures f or redemption of treasury shares	034	0	0	0	0
5. Other expenditures f rom f inancial activ ities	035	1.547.996	0	1.547.996	339.158
VI. Total expenditures from financial activities (031 to 035)	036	27.965.940	22.848.648	38.828.547	40.451.939
C1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES	037	0	0	0	0
C2) NET DECREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES	038	24.365.940	13.932.867	38.828.547	17.130.489
Total increase in cash f low (013 – 014 + 025 – 026 + 037 – 038)	039	0	4.543.607	0	51.536.889
Total decrease in cash f low (014 – 013 + 026 – 025 + 038 – 037)	040	51.524.239	0	49.575.657	51.159.187
Cash and cash equivalents at the beginning of the period	041	86.848.943	89.349.072	105.428.124	107.378.391
Increase in cash and cash equivalents	042	0	4.543.607	0	377.702
Decrease in cash and cash equivalents	043	51.524.239	0	49.575.657	0
Cash and cash equivalents at the end of the period	044	35.324.704	93.892.679	55.852.467	107.756.093

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	87.214.738	87.974.191	87.214.738	87.974.191
3. Reserves from profit	003	43.675.007	43.675.007	74.860.772	76.437.164
4. Retained profit or loss carried forw ard	004	-175.222.643	-152.912.201	-254.040.325	-245.756.266
5. Profit or loss of current year	005	22.310.442	-34.958.607	12.364.147	-45.538.341
6. Revaluation of longterm tangible assets	006	69.402.489	69.402.489	69.402.489	69.402.489
7. Revaluation of intangible assets	007	0	0	0	0
8. Revaluation of financial assets available for sale	008	0	0	0	0
9. Other revaluations	009	0	0	0
10.Total equity and reserves (AOP 001 to 009)	010	294.573.083	260.373.929	236.994.871	189.712.288
11. Foreign exchange differences arising from the titles of net investment in foreign operations	011	0	0	-721.078	1.822.697
12. Current and deferred taxes (part)	012	0	0	0	0
13. Cash flow protection	013	0	0	0	0
14. Changes in accounting policies	014	0	0	0	0
15. Correction of significant errors in the previous period	015	0	0	0	0
16. Other changes in equity	016	23.389.416	-34.199.154	13.443.446	-49.103.703
17. Total increase or decrease in equity (AOP 011 to 016)	017	23.389.416	-34.199.154	12.722.368	-47.281.006
17 a. Attributed to parent company equity holders	018	0	0	12.721.591	-47.282.583
17 b. Attributed to minority interest	019	0	0	777	1.577

1. BASIC INFORMATION

MANAGEMENT BOARD

Alen Premužak - Chairman of the Management Board Helena Jurčić Šestan - Management Board member Ivica Kranjčić - Management Board member Ivan Kurobasa - Management Board member

SUPERVISORY BOARD

UNTIL 05.09.2018. Željko Perić - President Hrvoje Markovinović - Member Hrvoje Habuš - Member Dinko Novoselec - Member Vlado Čović - Member Vladimir Maoduš - Member Rajko Pavelić - Member

FROM 05.09.2018. Željko Perić - President Hrvoje Markovinović - Member Hrvoje Habuš - Member Dinko Novoselec - Member Gordan Kuvek - Member Vladimir Maoduš - Member Rajko Pavelić - Member

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 Share capital: 247,193,050.00 HRK. Number of shares: 24,719,305 IBAN: HR8323600001101226102 ZABA Zagreb Reg. No.: 080010093, Commercial Court in Zagreb Stat. No.: 3275531 PIN: 47911242222 Activity code: 4222 (Construction of electricity and telecommunications lines)

2. SHAREHOLDERS STRUCTURE (on 30 September 2018):

Konsolidator d.o.o.	15,000,000
Domestic natural persons	4,878,872
Financial institutions	4,062,497
Others	679,095
Own shares	98,841
TOTAL	24,719,305

3. ACQUISITION AND MERGERS

There were no acquisitions or mergers in the first nine months of 2018.

4. UNCERTAINTY

There were no identified suspicious or disputable claims in the first nine months of 2018 which would affect the continuity of business.

5. DESCRIPTION OF PRODUCTS AND SERVICES

Over time, Dalekovod d.d. specialized for the realisation of "turn-key" contracts in the following fields:

• electricity facilities, especially transmission lines between 0.4 and 750 kV
• transformer substations of all levels and voltages up to 500 kV
• air, underground and underwater cables up to 100 kV
• telecommunications facilities, all types of networks and antennas
• production of suspension and jointing equipment for all types of transmission lines and sub-stations between 0.4 and 750 kV
• manufacture and installation of all metal parts for roads, especially for road lighting, security barriers and traffic signals, tunnel lighting and traffic management
• · electrification of railroads and tramways

6. CHANGES IN ACCOUNTING POLICIES

There are no new accounting policies.