Ericsson Nikola Tesla d.d.

Annual Report • Feb 24, 2022

ERICSSON NIKOLA TESLA d.d. Krapinska 45 10000 Zagreb

SECURITY: ERNT (ISIN: HRERNTRA0000) LEI: 5299001W91BFWSUOVD63 HOME MEMBER STATE: Republic of Croatia REGULATED MARKET SEGMENT: Regular market of the Zagreb Stock Exchange

Ericsson Nikola Tesla Group

Management Report on the Company and Ericsson Nikola Tesla Group business performance with comments on the financial results for 2021

Highlights:

• Sales revenue: MHRK 2,203.9
• Gross margin: 11.5%
• Operating profit: MHRK 186.4
• Profit before tax: MHRK 194.2
• Net profit: MHRK 177.3
• Cash flow from operating activities: MHRK 369.9

All Ericsson Nikola Tesla Group's key performance indicators show growth and a continuation of excellent business results.

Gordana Kovačević, the President of Ericsson Nikola Tesla, commented:

"In Ericsson Nikola Tesla Group, 2021 will be remembered as another year during which, with a lot of skills, knowledge and dedication, we effectively managed health, economic and social consequences of the pandemic and despite these, and all other challenges, achieved defined business targets. Strategic multi-year agreements we signed in 2020 and 2021 with the customers in Croatian and export markets, new responsibilities assigned by Ericsson to our R&D Center and other expert centers for end-to-end solutions and services, our experts' quality and innovativeness, as well as a continuous focus on new areas of growth and transformation processes in the company, had a significant positive impact on the company's results. We have been carefully monitoring and analyzing all the risks, including the disruptions in the global supply chain, as well as economic and political situation in certain markets, and our business results show that we managed to remove or mitigate most of them. We have continued to build an innovative organizational culture of high performance and invest in the future in order to secure successful and long-term sustainable business performance. Another successful year can be attributed to our continuous focus on the customers, investment in technology leadership and exceptional contribution of our employees. I would like to use this opportunity to thank all our employees for their focus, professionalism and integrity, their perseverance and dedication even in such demanding circumstances, as well as our customers and partners for their confidence in us.

In order to support our customers and secure company's business growth, we have continued to recruit, and in 2021 more than 400 new employees strengthened our big team. The Group now has almost 3,500 employees, mainly highly educated STEM experts. The biggest software design center in Croatia is in Ericsson Nikola Tesla, where more than 1700 experts work on the latest technologies, and that has the potential for further growth. The Group continues to be at the top of the list of the most successful Croatian exporters and is a leader in exporting knowledge.

Compared to 2020, sales revenue increased by 8.9% to MHRK 2,203.9, and all market segments (domestic, export and Ericsson) recorded growth. Gross margin increased significantly to 11.5% (2020: 8.6%). Gross profit increased by 45.9% to MHRK 254.3, as a result of business mix, lower transition and transformation costs, and the effect of operational and cost efficiency programs. This resulted in strong increase of operating profit by 78.6% to MHRK 186.4. Net profit increased by 87.6% to MHRK 177.3. A strong cash flow from operating activities was also achieved, amounting to MHRK 369.9, and thus at the end of 2021, cash and cash equivalents, including short-term financial assets, amounted to MHRK 510.5.

When we talk about global trends, COVID-19 pandemic has once again confirmed the importance of digitalization and the need to connect all business processes. In operator segment, the most significant event of Q3 2020 in Croatia, a public auction for the allocation of the frequency spectrum for 5G network, gave momentum to 5G technology implementation. Our strategic partners, Hrvatski Telekom (HT) and A1 Hrvatska have intensified the implementation of 5G technology across Croatia, and our company, as the provider of solutions, equipment and services for 5G, supported them in this demanding process. We are proud to be recognized and valued as a reliable partner that provides the best customer experience on a quality and safe infrastructure, and this is also confirmed by independent international tests that rank our customers' networks among the best in the world year after year. As regards 5G, we also wish to highlight the contribution of our Research & Development Center (R&D) experts, who have been working within global teams on further development of this technology, as well as our experts from other centers, who worked on the implementation and optimization of 5G networks for Ericsson strategic customers worldwide.

In the segment of build and maintenance of fixed and mobile telecommunication infrastructure of HT, which was carried out by our daughter-company Ericsson Nikola Tesla Servisi d.o.o., we have continued a successful realization of the agreed objectives and activities, and would like to emphasize the completion of FTTH connections build for more than 100,000 households.

In ICT for Industry & Society, we have been focused on e-Health, e-Business, public safety and innovative solutions for Industry 4.0, which strengthened our overall business results. Our team developed and tested the upgrade of Central Healthcare Information System of the Republic of Croatia (CEZIH), and in cooperation with the Croatian Ministry of Health, Ministry of the Interior of the Republic of Croatia, and partners, integrated it in the comprehensive solution for EU Digital COVID Certificate. We also made a significant step forward in e-Environment. Through WaterQ project, co-financed by European funds, we are developing a solution to improve water quality control for the systems of public health and water supply.

In cooperation with all the stakeholders of the ecosystem, which includes operators, industry, public administration and education sector, we try to use 5G innovation potential in the best way possible to create new opportunities and revenues in various sectors. In this way we contribute to sustainability and global competitiveness of Croatian economy, in addition to creating new job opportunities.

In export markets, we would like to highlight the contracts signed with the operator HT Mostar (Bosnia and Hercegovina) on upgrade and expansion of LTE RAN network, expansion of transmission network and software upgrade and expansion of systems for wireline switching. We have also continued a successful cooperation with our long-term customers, the operators Ipko (Kosovo), Crnogorski Telekom (Montenegro), beCloud (Belarus), Beltelekom (Belarus) and A1 (Belarus) on the expansion, modernization and maintenance of telecommunication networks. In ICT solutions for Industry & Society, the implementation of the second phase of the national health IT platform in Belarus is ongoing. A challenging political situation in some markets, such as in Belarus, continues at the time this report is published. We have been monitoring the situation development and continue to estimate risks in order to timely respond to potential challenges. During the year, we have continued a successful cooperation with the Croatian Bank for Reconstruction and Development (HBOR) to additionally strengthen export in certain markets, and at the same time reduce the political and the financial risks to which the company is exposed to.

The delivery of services to Ericsson has been continuously increasing, and all the activities are ongoing as planned. R&D Center and other expert centers, owing to its experts' knowledge and work, continue to build a positive perception in global corporation and significantly contribute to our company's results. The majority of activities in R&D Center is related to the most important Ericsson's 5G/Cloud products in the segment of radio access and core telecommunication networks. A continuously high quality of software deliveries was recognized by a global customer, and in Q4 2021 an additional expansion of responsibilities was secured in the latest 5G/Cloud business and other technologies. We have continued a very good cooperation with faculties in Zagreb/Split/Osijek, and thus more than 150 students have the opportunity to daily learn and develop their skills by participating in research and development projects.

Furthermore, we have continued to work with students through our Summer Camp. Last year Summer Camp marked its 20th anniversary, and during this period 820 students participated in 380 projects, supported by 150 mentors.

In 2022, we expect increase in demand for ICT solutions to continue, which opens new opportunities for our company. We will continue to invest in research, development and implementation of modern ICT solutions, as well as our own digital transformation. Moreover, we will continue to invest in skills and knowledge of our employees, who are the key to our success, take care of their physical and mental health, and open new jobs. In this way, we secure our company's successful and long-term sustainable business performance and contribute to the realization of EU objectives in a digital decade. Having in mind the importance of ICT as the foundation of the networked society's digital infrastructure, we are positive about the further development of our industry, and the role Ericsson Nikola Tesla Group has in this process.

In addition to the opportunities it brings, 2022 will be a challenging year due to political and economic uncertainties, disruptions in supply chain, significant increase in energy prices, increase in the prices of materials, raw materials and services, and will demand great knowledge, leadership and strong focus on company's strategic directives. We remain focused on further risk management, profitability and cash flow, and on corporate social responsibility. We will put our maximum efforts to continue to be as efficient and as successful, both in overcoming challenges, as well as in the realization of new business opportunities. Excellent business results achieved in 2021 motivate us for further excellence in everything we do."

Financial highlights for the Group:

• Sales revenue amounted to MHRK 2,203.9 (2020: MHRK 2,023.0), up by 8.9% year-over-year, and the increase was recorded in all market segments. In total sales revenue, the domestic market accounted for 47.7%, services to Ericsson accounted for 40.8%, while other export markets accounted for 11.5%.
• Sales in the Networks segment amounted to MHRK 957.3 (2020: MHRK 980.5), Digital Services segment amounted to MHRK 582.0 (2020: MHRK 464.8), Managed Services segment amounted to MHRK 658.9 (2020: MHRK 569.6), and Emerging Business and Other amounted to MHRK 5.7 (2020: MHRK 8.1).
• Gross profit was MHRK 254.3 (2020: MHRK 174.4), up by 45.9% year-over-year, as a result of business mix, lower transition and transformation costs, and the effect of operational and cost efficiency programs. Gross margin increased to 11.5% (2020: 8.6%).
• Selling and administrative expenses were 10.6% higher year-over-year, amounting to MHRK 92.7 (2020: MHRK 83.8). The share of selling and administrative expenses in sales revenue was 4.2% (2020: 4.1%).
• Operating profit amounted to MHRK 186.4, up by 78.6% year-over-year (2020: MHRK 104.4) as a result of significant increase in gross profit.
• Gain from financial activities amounted to MHRK 7.8 (2020: MHRK 2.2) as a result of positive exchange differences and interest income.
• Profit before tax increased by 82.1% year-over-year to MHRK 194.2 (2020: MHRK 106.6).
• Net profit amounted to MHRK 177.3 (2020: MHRK 94.5), up by 87.6% year-over-year. Return on Sales (ROS) was 8.0% (2020: 4.7%).
• Cash flow from operating activities amounted to MHRK 369.9 (2020: MHRK 308.1) because of advanced payments and excellent cash collection from certain customers.
• Working Capital Efficiency, expressed in WCD, was 8 days (2020: 25 days), and excluding services to Ericsson, Working Capital Efficiency was 25 days (2020: 44 days). The reduced number of Working Capital Days is the result of finalization of demanding network modernization projects, which until now required a longer and a more intense engagement of material and human resources.
• Cash and cash equivalents, including short term financial assets, as at December 31, 2021, amounted to MHRK 510.5 (42.4% of the total assets), while at the end of 2020, they amounted to MHRK 314.0 (31.6% of the total assets). The increase of cash is the result of increase of business activities, good cash collection from customers and received advanced payments on certain contracts.
• The Group has a solid balance sheet with the total assets of MHRK 1,203.7 as at December 31, 2021, up by 21.1% compared to the end of 2020. The increase of balance sheet is mainly contributed by the workin progress (WIP) conditioned by the contract execution dynamics, new receivables as well as strong growth of cash in the observed period. Equity ratio was 33.6% (end of 2020: 34.8%).
• With related parties, the transactions were as follows: sales of products and services amounted to MHRK 900.0 (2020: MHRK 858.4), while the procurement of products and services amounted to MHRK 297.2 (2020: MHRK 314.7).
• As at December 31, 2021, balances outstanding with related parties were as follows: receivables amounted to MHRK 76.8 (end of 2020: MHRK 89.0), and payables MHRK 12.6 (end of 2020: MHRK 10.9).

Business situation in major markets

In the domestic market, sales revenue amounted to MHRK 1,051.2 (2020: MHRK 926.7), up by 13.4% yearover-year.

With the strategic partner Hrvatski Telekom, we signed 3 contracts related to design/ build of the passive part of FTTH network. The contracts are co-financed by the European Structural and Investment Funds and will enable the build of the next generation access networks (NGA) and fast and ultra-fast broadband access to network infrastructure for business and public users from remote, not as densely populated and not as developed areas of the Republic of Croatia. We have continued a successful realization of the Management Services Agreement for the construction and maintenance of fixed and mobile telecommunications infrastructure, supervision of the telecommunications network, and field maintenance of the active access and passive network, and we would like to highlight the build of FTTH connections for more than 100,000 households.

In the domain of the radio part of mobile network, the focus of our strategic parentship was on the activities related to 5G technology implementation. After the allocation of the frequency spectrum for 5G since mid-August 2021, HT enabled gigabit transfer speed in several towns across Croatia. Moreover, with the support of Ericsson Nikola Tesla's experts, in October 2021 the capabilities of 5G+ technology were demonstrated, with the achieved speeds of up to 4 Gbit/s, and network response time of only 10 milliseconds.

With the strategic partner A1 Hrvatska, important multi-year agreements were signed in 2021. The first agreement was signed in March in radio network and referred to multi-year cooperation on the introduction of 5G radio technology, as well as existing network modernization and expansion of capacities on LTE technology. The second important contract was signed during summer, and encompasses the convergent 5G core network that will, along with the existing core network, secure the possibility to provide an advanced 5G user experience as a response to increasing demands of end users and business clients of A1 Hrvatska. Following the procedure of frequency spectrum allocation in August 2021, A1 Hrvatska successfully launched 5G service into commercial operation on the frequencies 700 MHz and 3.5 GHz. Moreover, 5G service is also commercially active on the existing frequency spectrum by using the Dynamic Spectrum Sharing (DSS) technology. At the same time, a successful cooperation on the implementation of 5G radio access network was expanded by the delivery of antenna systems (Ericsson Antenna System), as well as the expansion and modernization of microwave transmission systems.

In regard to ICT solutions for Industry & Society, contracts were signed with the State Geodetic Administration and the Ministry of Justice and Public Administration for the development and upgrade of the One Stop Shop-OSS of the Joint Information System of Land Registry and Cadaster (JIS). With the Ministry of Justice and Public Administration a contract was signed for the creation of the central database for local and regional municipalities. With the company Odašiljači i veze d.o.o., we signed a contract for the implementation of private 5G network. With the Ministry of the Interior of the Republic of Croatia, we have continued the implementation of the state border monitoring solution. Moreover, further informatization of the Joint Information System of Land Registry and Cadaster has continued. For the Croatian Ministry of Health, further IT upgrade of the Central Healthcare Information System of the Republic of Croatia continued.

In export markets (excluding services to Ericsson) sales revenue amounted to MHRK 253.2 (2020: MHRK 234.4), up by 8.0% year-over-year.

In addition to the negative impact of COVID-19 pandemic, the political and economic crisis in certain markets has been additionally aggravating business performance. In operator segment, sales revenue decreased due to operators' investment dynamics, which was offset by the increase in revenue in the Industry & Society segment from the contract related to healthcare informatization in Belarus.

In Q4 2021, contracts with HT Mostar were signed for the upgrade and expansion of LTE RAN network, expansion of transmission network and software upgrade and expansion of wireline switching system. Thus, by using Ericsson solutions, HT Mostar will expand the capacities of 4G/4G+ network and increase coverage, which means better services and the best possible experience for end users.

We have continued the activities on the modernization and expansion of telecommunication network of Crnogorski Telekom and in cooperation with Ericsson Nikola Tesla, this operator was the first one in Montenegro to have implemented and tested 5G. With the operator IPKO we have agreed further expansion and upgrade of LTE RAN network, expansion of transmission network and software upgrade and expansion of system for packet network. In the Belarusian market, with caution and focus on business risks mitigation, several new contracts were signed related to mobile networks expansion of operators beCloud and A1 Belarus.

In ICT for Industry & Society, we have continued the implementation of the Central Software Platform for the Centralized e-Health System of the Republic of Belarus. During Q3, the project's first phase was accepted (creating project documents with the requested platform software specifications), and in Q4 we have continued the activities within the project's second phase (detailed specification of platform functionalities and software solution development). In the segment of Industry 4.0, we started the implementation of the management and monitoring platform of the industry's impact on the environment for EP HZHB – (Elektroprivreda Mostar).

In Ericsson market, sales revenue amounted to MHRK 899.5 (2020: MHRK 861.9), up by 4.4% year-over-year.

At the end of 2021, Ericsson Nikola Tesla's R&D Center had over 1500 employees. In the business segment Networks, besides the development of features related to classic and 5G products, a prototype presentation was successfully delivered, and we have also gained new responsibilities in Compute and Digital Silicon area. Within the business segment Digital Services in the area Mobile Switching Center, activities continued in automation and virtualization, and additional SIP (Session Initiation Protocol) features were prepared for final delivery. In the area Home Location Register, numerous features were delivered, and customer support requests were successfully executed. Within Cloud, besides the development and verification activities, transfer of new responsibilities is ongoing, and an increased scope of planned activities for 2022 was confirmed. In the area Unified Data Management, the work on a number of features and quality improvements is ongoing, as well as on the verification activities. In Service Area Networks, Wireline and Legacy, number of customer support activities were successfully executed, and support services for the next period were agreed.

The experts from the Center for Services and Solutions for Networks, in addition to projects for the customers of Ericsson Nikola Tesla Group, are included in the design and optimization activities and integration of various technologies for Ericsson customers in the United Kingdom, Germany, Sweden, Switzerland, Spain, Ireland, Denmark, Norway, Belgium, Czech Republic, Slovakia, Romania, Lithuania, Greece, Malta, Morocco, Algeria, Canada, USA, Saudi Arabia, Bahrein, Singapore, Kenya, India, Pakistan, Nigeria, Japan, Indonesia, Malaysia, Taiwan, Vietnam, Hong Kong, Brazil, Japan, SAR, etc. We also became one of the four Ericsson regional centers in the world for services in Networks – Service Area Network and build – Service Area Build.

The activities continued on the development and implementation of software tools for mobile networks management and optimization which are used in the network rollout by many operators worldwide, with which Ericsson and Ericsson Nikola Tesla do business.

Experts from Services and Solutions Center in the field of Digital Services, Media and Operations, in addition to projects for the customers of Ericsson Nikola Tesla Group, were also engaged on projects for Ericsson customers in the United Kingdom, Germany, Sweden, Switzerland, Denmark, Finland, France, Luxembourg, the Netherlands, Ireland, Norway, Lithuania, Italy, Greece, Albania, Macedonia, Czech Republic, Australia, Tahiti, Pakistan, Mexico, etc. These are complex projects of introduction of 5G technology, operational and business

support systems, as well as projects of introduction of core solutions in Cloud.

Within the program EU Insulae h2020 (Industry 4.0), we have been developing a platform for monitoring and management of energy flows on the island Unije. This includes building a platform which collects data for sensors' infrastructure based on IoT technologies, analyses the data and with the assistance of artificial intelligence provides recommendations to optimize consumption.

The teams working in IT& Engineering Services, in addition to providing excellent support and achieving excellent results on test environment management projects and IT operations for Ericsson corporation, also had a key role in transformation processes of Ericsson Nikola Tesla Group and provided quality support for a smooth work from home and remote support to customers.

The ICT segment for Industry and Society, in addition to many projects for Ericsson Nikola Tesla's customers, also achieved quality results on projects in IoT platforms and Connected Urban Traffic for the needs of Ericsson corporation.

Other information

Ericsson Nikola Tesla's major shareholders (as at December 31, 2021)

	Number of shares	% of share capital
Telefonaktiebolaget LM Ericsson	653,473	49.07
PBZ d.d. / Raiffeisen mandatory pension fund, B category	123,514	9.28
Erste & Steiermarkische Bank d.d / PBZ Croatia osiguranje mandatory pension fund, B category	40,490	3.04
OTP banka d.d. / Erste Plavi mandatory pension fund, B category	30,961	2.33
Raiffeisenbank Austria d.d. / Raiffeisen voluntary pension fund	16,739	1.26
PBZ d.d. / custodian client account	10,703	0.80
PBZ d.d. / The Bank of New York as Custodian	9,860	0.74
OTP banka d.d. / OTP Index fund - open-end alternative investment fund with public offering	9,474	0.71
Ericsson Nikola Tesla d.d.	6,951	0.52
Vuleta Ivica	5,318	0.40
Other shareholders	424,167	31.85

Share price information in 2021:

Highest (HRK)	Lowest (HRK)	Closing (HRK)	Market cap. (in MHRK)
1,950.00	1,500.00	1,840.00	2,450.2

Ericsson Nikola Tesla d.d. Krapinska 45 Zagreb

OIB: 84214771175

Pursuant to the Articles 462 to 468 of the Capital Market Law (Official Gazette 65/18) the Managing Director of the joint stock company Ericsson Nikola Tesla d.d. Zagreb, Krapinska 45 gives the following:

Statement

of the Management Board responsibility

The accompanying consolidated and non-consolidated financial statements have been prepared in compliance with the International Financial Reporting Standards (IFRS). The financial statements also comply with the provisions of the Croatian Financial Accounting Law valid as of the date of these financial statements.

Unaudited financial statements for the period January 1, 2021 to December 31, 2021 present a true and fair view of the financial position of the Company and the Group and of the financial performance and cash flows in compliance with applicable accounting standards.

Managing Director:

Gordana Kovačević, MSc

For additional information, please contact:

Snježana Bahtijari Orhideja Gjenero Company Communications Director Investor Relations Manager Ericsson Nikola Tesla d.d. Ericsson Nikola Tesla d.d. Krapinska 45 Krapinska 45 HR-10 002 Zagreb HR-10 002 Zagreb Tel.: +385 1 365 4556 Tel.: +385 1 365 4431 Mob.: +385 91 365 4556 Mob.: +385 91 365 4431 Fax: +385 1 365 3156 Fax: +385 1 365 3156 E-mail: snjezana.bahtijari@ericsson.com E-mail: orhideja.gjenero@ericsson.com

E-mail: odnosi.investitori@ericsson.com

For more information about Ericsson Nikola Tesla's business, please visit: http://www.ericsson.hr

Ericsson Nikola Tesla d.d. Statement of comprehensive income

for the period ended 31 December 2021

	2021	2020
	HRK '000	HRK '000
Sales revenue	1.522.626	1.417.214
Cost of sales	-1.351.875	-1.272.263
Gross profit	__ 170.751	__ 144.951
Selling expenses	-42.775	-39.710
Administrative expenses	-39.965	-33.714
Other operating income	22.918	20.301
Impairment loss on financial assets	-385	-9.336
Operating profit	__ 110.544	__ 82.492
Finance income	__ 9.630	__ 6.133
Finance expense	-1.142	-3.385
Finance income/(expense), net	__ 8.488	__ 2.748
Profit before tax	__ 119.032	__ 85.240
Income tax	-3.825	-8.749
Profit for the year	__ 115.207	__ 76.491
Other comprehensive income	__ -	__ -
Total comprehensive income for the year	__ 115.207	__ 76.491
Earnings per share (HRK)	__ 87	__ 57

Ericsson Nikola Tesla d.d. Statement of financial position

as at 31 December 2021

	2021	2020
	HRK '000	HRK '000
ASSETS
Non-current assets
Property, plant and equipment	129.380	148.687
Right of use assets Intangible assets	29.231	37.780
Investments in subsidiaries	1.080 1.053	347 1.053
Loans and receivables	21.976	37.867
Deferred tax assets	12.555	8.397
	__	__
Total non-current assets	195.275 __	234.131 __
Current assets
Inventories	89.048	44.179
Trade receivables	108.484	81.353
Receivables from related parties	80.178	97.933
Contract Assets	-	-
Other receivables	36.236	5.729
Income tax receivable	-	11.651
Financial assets at fair value through profit or loss	32.997	32.936
Prepayments	6.335	32.379
Cash and cash equivalents	332.301 __	245.833 __
Total current assets	685.579	551.993
TOTAL ASSETS	__ 880.854	__ 786.124
EQUITY AND LIABILITIES	__	__
Equity Share capital	133.165	133.165
Treasury shares	-12.421	-506
Legal reserves	6.658	6.658
Reserve for treasury shares	36.512	13.904
Retained earnings	139.322	153.872
Total equity	__ 303.236	__ 307.093
Non-current liabilities	__	__
Borrowings	16.982	30.292
Lease liabilities	21.314	26.559
Other non-curent liabilities	442	411
Employee benefits	6.102	7.335
Total non-current liabilities	__ 44.840	__ 64.597
Current liabilities	__	__
Payables to related parties	5.797	29.759
Borrowings	14.088	14.236
Trade and other payables	148.676	112.735
Income tax payable	4.103	-
Provisions	13.307	13.598
Accrued charges and deferred revenue	91.365	65.300
Contract liabilities Lease liabilities	247.309 8.133	167.119 11.687
Total current liabilities	__ 532.778	__ 414.434
Total liabilities	__	__
	577.618 __	479.031 __
TOTAL EQUITY AND LIABILITIES	880.854	786.124

Ericsson Nikola Tesla d.d.

Statement of cash flows

for the period ended 31 December 2021

	HRK '000	HRK '000
Cash flows from operating activities
Profit before tax	119.032	85.240
	_	_
Adjustments for:
Depreciation and amortisation	45.171	42.734
Effects of lease derecognition	-3	-
Impairment losses and reversals	-400	9.934
Gain on sale of property, plant and equipment	-43	-25
Net loss/(gain) on remeasurement of financial assets	-121	-265
Amortisation of discount Interest income	52 -3.741	13 -6.031
Interest expense	1.058	1.291
Foreign exchange (gains)/losses, net	-4.651	4.783
Equity-settled transactions	4.405	3.268
	_	_
	160.759	140.942
Changes in working capital
In receivables	4.580	135.657
In inventories	-44.869	125.746
In provisions	-1.524	748
In payables	128.943	-125.472
	_	_
Cash generated from operations	247.889	277.621
	_	_
Interest paid	-1.238	-1.224
Income taxes paid	-78	-407
	_	_
Net cash from operating activities	246.573	275.990
	_	_
Cash flows from investing activities
Proceeds from loans given	-	16.014
Loans given	-	-15.000
Interest received	2.834	1.784
Dividends received	59	59
Proceeds from sale of property, plant and equipment	108	169
Purchases of property, plant and equipment, and intangible assets	-15.262	-59.252
Deposits given to financial institutions - net	-1.208	789
Receipt of government grant	1.325	11.261
Net change of financial assets at fair value through profit and loss	-	5.013
	_	_
Net cash used in investing activities	-12.144	-39.163
	_	_
Cash flows from financing activities
Proceeds from borrowings	-	20.609
Repayment of borrowings	-14.831	-13.796
Purchase of treasury shares	-14.307	-1.235
Dividends paid	-109.166	-65.231
Payment of lease liabilities	-11.697	-11.502
	_	_
Net cash used in financing activities	-150.001	-71.155
	_	_
Effects of exchange rate changes on cash and cash equivalents	2.040	-1.672
	_	_
Net increase/(decrease) in cash and cash equivalents	86.468	164.000
Cash and cash equivalents at the beginning of the year	245.833	81.833
	_	_
Cash and cash equivalents at the end of the year	332.301	245.833
	_	_

2021 2020

Annex 1
		ISSUER'S GENERAL DATA
Reporting period:		1.1.2021	31.12.2021 to
Year:		2021
Quarter:		4.
		Quarterly financial statements
egistration number (MB):	03272699		Issuer's home Member HR State code:
Entity's registration number (MBS):	0800002028
Personal identification number (OIB):	84214771175		5299001W91BFWSUOVD63 LEI:
Institution code:	233
	Name of the issuer: ERICSSON NIKOLA TESLA D.D. ZAGREB
Postcode and town:	10000		Zagreb
Street and house number: Krapinska 45
	E-mail address: etk.company@ericsson.com
	Web address: www.ericsson.hr
Number of employees (end of the reporting	2669
Consolidated report:	KN	(KN-not consolidated/KD-consolidated)	KN	KD
Audited: (RN-not audited/RD-audited) RN RD RN
	Names of subsidiaries (according to IFRS):		Registered office:	MB:
				Yes
Bookkeeping firm:	No	(Yes/No)	(name of the bookkeeping firm)	No
	Contact person: Tatjana Ricijaš
	(only name and surname of the contact person) Telephone: +385(0)13653343
	E-mail address: tatjana.ricijas@ericsson.com
	Audit firm: KPMG Croatia d.o.o.
	(name of the audit firm)
	Certified auditor: Domagoj Hrkać (name and surname)

BALANCE SHEET balance as at 31.12.2021

Submitter: ERICSSON NIKOLA TESLA D.D.			in HRK
Item	ADP	Last day of the	At the reporting date
	code	preceding business	of the current period
1	2	year 3	4
A) RECEIVABLES FOR SUBSCRIBED CAPITAL UNPAID	001	0	0
B) FIXED ASSETS (ADP 003+010+020+031+036)	002	234.131.271	197.106.370
I INTANGIBLE ASSETS (ADP 004 to 009)	003	347.257	1.079.766
1 Research and development	004	0	0
2 Concessions, patents, licences, trademarks, software and other rights	005	347.257	1.079.766
3 Goodwill	006	0	0
4 Advances for the purchase of intangible assets	007	0	0
5 Intangible assets in preparation	008	0	0
6 Other intangible assets	009	0	0
II TANGIBLE ASSETS (ADP 011 to 019)	010	186.466.923	160.442.493
1 Land	011	15.605.344	15.605.344
2 Buildings	012	63.556.029	82.568.871
3 Plant and equipment	013	59.069.829	46.789.811
4 Tools, working inventory and transportation assets	014	16.328.620	14.804.630
5 Biological assets	015	0	0
6 Advances for the purchase of tangible assets	016	0	0
7 Tangible assets in preparation 8 Other tangible assets	017	31.854.457	627.030
9 Investment property	018	52.644	46.807
	019	0	0
III FIXED FINANCIAL ASSETS (ADP 021 to 030)	020	24.795.092	17.533.295
1 Investments in holdings (shares) of undertakings within the group	021	1.052.798	1.052.798
2 Investments in other securities of undertakings within the group	022	0	0
3 Loans, deposits, etc. to undertakings within the group	023	0	48.531
4. Investments in holdings (shares) of companies linked by virtue of participating interests	024	0	0
5 Investment in other securities of companies linked by virtue of participating interests	025	0	0
6 Loans, deposits etc. to companies linked by virtue of participating interests	026	0	0
7 Investments in securities 8 Loans, deposits, etc. given	027	0	0
9 Other investments accounted for using the equity method	028	23.742.294	16.431.966
	029	0	0
10 Other fixed financial assets	030	0	0
IV RECEIVABLES (ADP 032 to 035)	031	14.124.953	5.495.745
1 Receivables from undertakings within the group 2 Receivables from companies linked by virtue of participating	032	0	0
interests	033	0	0
3 Customer receivables	034	13.688.818	5.127.139
4 Other receivables	035	436.135	368.606
V DEFERRED TAX ASSETS	036	8.397.046	12.555.071
C) CURRENT ASSETS (ADP 038+046+053+063)	037	519.614.299	679.244.968
I INVENTORIES (ADP 039 to 045)	038	44.178.636	89.047.839
1 Raw materials and consumables	039	0	0
2 Work in progress	040	44.178.636	89.047.839
3 Finished goods	041	0	0
4 Merchandise	042	0	0
5 Advances for inventories	043	0	0
6 Fixed assets held for sale	044	0	0
7 Biological assets	045	0	0
II RECEIVABLES (ADP 047 to 052)	046	192.626.445	211.581.418
1 Receivables from undertakings within the group 2 Receivables from companies linked by virtue of participating	047	10.027.853	5.786.039
interests	048	87.904.823	74.392.078
3 Customer receivables	049	81.353.019	108.484.202
4 Receivables from employees and members of the undertaking	050	0	0
5 Receivables from government and other institutions	051	12.276.444	4.496.122
6 Other receivables	052	1.064.306	18.422.977
III CURRENT FINANCIAL ASSETS (ADP 054 to 062)	053	36.976.148	46.314.419
1 Investments in holdings (shares) of undertakings within the group	054	0	0
2 Investments in other securities of undertakings within the group	055	0	0
3 Loans, deposits, etc. to undertakings within the group	056	0	0
4 Investments in holdings (shares) of companies linked by virtue of participating interests	057	0	0
5 Investment in other securities of companies linked by virtue of participating interests	058	0	0
6 Loans, deposits etc. to companies linked by virtue of participating interests	059	0	0
7 Investments in securities	060	32.936.148	32.997.449
8 Loans, deposits, etc. given	061	4.040.000	13.316.970
9 Other financial assets	062	0	0
IV CASH AT BANK AND IN HAND	063	245.833.070	332.301.292
D ) PREPAID EXPENSES AND ACCRUED INCOME E) TOTAL ASSETS (ADP 001+002+037+064)	064	32.378.858	6.334.220
OFF-BALANCE SHEET ITEMS	065	786.124.428	882.685.558
	066	0	0
LIABILITIES A) CAPITAL AND RESERVES (ADP 068 to	067	307.093.382	303.235.757
I INITIAL (SUBSCRIBED) CAPITAL	068	133.165.000	133.165.000
II CAPITAL RESERVES	069	0	0
III RESERVES FROM PROFIT (ADP 071+072-073+074+075)	070	20.055.496	30.748.156
1 Legal reserves	071	6.658.250	6.658.250
2 Reserves for treasury shares	072	13.903.446	36.511.836
3 Treasury shares and holdings (deductible item)	073	-506.200	-12.421.930
4 Statutory reserves	074	0	0
5 Other reserves	075	0	0
IV REVALUATION RESERVES	076	0	0
V FAIR VALUE RESERVES AND OTHER (ADP 078 to 082) 1 Financial assets at fair value through other comprehensive income	077	0	0
(i.e. available for sale)	078	0	0
2 Cash flow hedge - effective portion	079	0	0
3 Hedge of a net investment in a foreign operation - effective portion	080	0	0
4 Other fair value reserves	081	0	0
5 Exchange differences arising from the translation of foreign	082	0	0
operations (consolidation) VI RETAINED PROFIT OR LOSS BROUGHT FORWARD (ADP 084-	083	77.382.005	24.115.606
085) 1 Retained profit	084	77.382.005	24.115.606
2 Loss brought forward	085	0	0
VII PROFIT OR LOSS FOR THE BUSINESS YEAR (ADP 087-088)	086	76.490.881	115.206.995
1 Profit for the business year 2 Loss for the business year	087	76.490.881	115.206.995
VIII MINORITY (NON-CONTROLLING) INTEREST	088	0	0
	089	0	0
B) PROVISIONS (ADP 091 to 096) 1 Provisions for pensions, termination benefits and similar	090	7.334.818	6.102.034
obligations	091	7.334.818	6.102.034
2 Provisions for tax liabilities	092	0	0
3 Provisions for ongoing legal cases	093	0	0
4 Provisions for renewal of natural resources	094	0	0
5 Provisions for warranty obligations	095	0	0
6 Other provisions	096	0	0
C) LONG-TERM LIABILITIES (ADP 098 to 108)	097	57.262.034	38.738.280
1 Liabilities to undertakings within the group	098	0	0
2 Liabilities for loans, deposits, etc. of undertakings within the group	099	0	0
3 Liabilities to companies linked by virtue of participating interests	100	0	0
4 Liabilities for loans, deposits etc. of companies linked by virtue of	101	0	0
participating interests 5 Liabilities for loans, deposits etc.	102	0	0
6 Liabilities to banks and other financial institutions	103	56.850.760	38.295.580
7 Liabilities for advance payments	104	0	0
8 Liabilities to suppliers	105	0	0
9 Liabilities for securities	106	0	0
10 Other long-term liabilities	107	411.274	442.700
11 Deferred tax liability	108	0	0
D) SHORT-TERM LIABILITIES (ADP 110 to 123) 1 Liabilities to undertakings within the group	109	192.526.767	246.632.690
2 Liabilities for loans, deposits, etc. of undertakings within the group	110	23.160.257	1.821.627
	111	0	0
3 Liabilities to companies linked by virtue of participating interests	112	6.598.169	3.975.002
4 Liabilities for loans, deposits etc. of companies linked by virtue of participating interests	113	0	0
5 Liabilities for loans, deposits etc.	114	0	0
6 Liabilities to banks and other financial institutions	115	25.922.607	22.221.607
7 Liabilities for advance payments	116	10.512.321	52.527.993
8 Liabilities to suppliers	117	3.481.087	14.406.438
9 Liabilities for securities	118	0	0
10 Liabilities to employees	119	84.092.234	111.900.908
11 Taxes, contributions and similar liabilities	120	25.161.965	26.471.734
12 Liabilities arising from the share in the result	121	0	0
13 Liabilities arising from fixed assets held for sale	122	0	0
14 Other short-term liabilities	123	13.598.127	13.307.381
E) ACCRUALS AND DEFERRED INCOME	124	221.907.427	286.145.711
F) TOTAL – LIABILITIES (ADP 067+090+097+109+124)	125	786.124.428	880.854.472
G) OFF-BALANCE SHEET ITEMS	126	0	0

for the period 01.01.2021 to 31.12.2021 STATEMENT OF PROFIT OR LOSS

in HRK

Submitter: ERICSSON NIKOLA TESLA D.D.	ADP	Same period of the previous year		Current period
Item 1	code	Cumulative	Quarter	Cumulative	Quarter
I OPERATING INCOME (ADP 002 to 006) 1 Income from sales with undertakings within the group	2 001	3 1.437.515.039	4 387.480.262	5 1.545.543.306	6 457.212.286
2 Income from sales (outside group) 3 Income from the use of own products, goods and services	002 003	21.202.972 1.396.011.390	11.661.196 368.778.090	7.118.754 1.515.506.761	-3.660.601 454.382.880
4 Other operating income with undertakings within the group	004 005	0 1.365.900	0 398.424	0 1.873.654	0 530.036
5 Other operating income (outside the group) II OPERATING EXPENSES (ADP 08+009+013+017+018+019+022+029)	006 007	18.934.777 1.355.023.392	6.642.552 373.706.326	21.044.137 1.434.999.255	5.959.971 435.042.852
1 Changes in inventories of work in progress and finished goods 2 Material costs (ADP 010 to 012)	008 009	126.343.754 398.645.257	33.687.576 98.925.701	-44.869.201 573.084.684	-7.319.455 178.071.437
a) Costs of raw materials and consumables b) Costs of goods sold	010	253.199.798 0	90.263.059 0	330.230.952 0	109.140.696 0
c) Other external costs	011 012	145.445.459	8.662.642	242.853.732	68.930.741
3 Staff costs (ADP 014 to 016) a) Net salaries and wages	013 014	727.640.967 427.906.735	203.696.552 118.561.930	805.663.166 490.300.113	237.513.103 140.969.838
b) Tax and contributions from salary costs c) Contributions on salaries	015 016	216.295.962 83.438.270	60.910.112 24.224.510	222.303.645 93.059.408	67.302.001 29.241.264
4 Depreciation 5 Other costs	017 018	42.733.755 43.221.087	11.005.170 15.124.900	45.171.233 46.835.080	10.688.334 18.270.894
6 Value adjustments (ADP 020+021) a) fixed assets other than financial assets	019 020	1.891.022 0	358.076 0	0 0	-1.357.399 0
b) current assets other than financial assets 7 Provisions (ADP 023 to 028)	021 022	1.891.022 5.211.518	358.076 2.219.871	0 8.729.611	-1.357.399 -1.076.962
a) Provisions for pensions, termination benefits and similar b) Provisions for tax liabilities	023 024	4.415.233 0	1.644.894 0	8.094.809 0	2.167.405 0
c) Provisions for ongoing legal cases d) Provisions for renewal of natural resources	025 026	0 0	0 0	0 0	0 0
e) Provisions for warranty obligations f) Other provisions	027 028	542.998 253.287	321.690 253.287	634.802 0	109.948 -3.354.315
8 Other operating expenses III FINANCIAL INCOME (ADP 031 to 040)	029 030	9.336.032 6.133.212	8.688.480 4.298.744	384.682 9.652.875	252.900 5.133.450
1 Income from investments in holdings (shares) of undertakings within the group	031	0	0	0	0
2 Income from investments in holdings (shares) of companies linked by virtue of participating interests	032	0	0	0	0
3 Income from other long-term financial investment and loans granted to undertakings within the group	033	0	0	0	0
4 Other interest income from operations with undertakings within the group	034	6.497	1	0	0
5 Exchange rate differences and other financial income from operations with undertakings within the group	035	0	-88.601	0	0
6 Income from other long-term financial investments and loans 7 Other interest income	036	0	0	0	0
8 Exchange rate differences and other financial income	037 038	6.024.715 0	4.285.344 0	3.740.809 4.631.326	1.250.520 2.771.791
9 Unrealised gains (income) from financial assets 10 Other financial income	039 040	0 102.000	0 102.000	0 1.280.740	0 1.111.139
IV FINANCIAL EXPENSES (ADP 042 to 048) 1 Interest expenses and similar expenses with undertakings within the	041 042	3.384.781 0	1.187.557 0	1.165.360 33.354	306.126 2.843
group 2 Exchange rate differences and other expenses from operations with	043	0	0	22.980	885
undertakings within the group 3 Interest expenses and similar expenses	044	1.291.152	314.632	1.057.558	250.930
4 Exchange rate differences and other expenses 5 Unrealised losses (expenses) from financial assets	045 046	2.080.585 0	928.061 0	0 0	0 0
6 Value adjustments of financial assets (net) 7 Other financial expenses	047 048	0 13.044	0 -55.136	0 51.468	0 51.468
V SHARE IN PROFIT FROM UNDERTAKINGS LINKED BY VRITUE OF PARTICIPATING INTERESTS	049	0	0	0	0
VI SHARE IN PROFIT FROM JOINT VENTURES VII SHARE IN LOSS OF COMPANIES LINKED BY VIRTUE OF	050 051	0 0	0 0	0 0	0 0
PARTICIPATING INTEREST VIII SHARE IN LOSS OF JOINT VENTURES	052	0	0	0	0
IX TOTAL INCOME (ADP 001+030+049 +050) X TOTAL EXPENDITURE (ADP 007+041+051 + 052)	053 054	1.443.648.251 1.358.408.173	391.779.006 374.893.883	1.555.196.181 1.436.164.615	462.345.736 435.348.978
XI PRE-TAX PROFIT OR LOSS (ADP 053-054) 1 Pre-tax profit (ADP 053-054)	055 056	85.240.078 85.240.078	16.885.123 16.885.123	119.031.566 119.031.566	26.996.758 26.996.758
2 Pre-tax loss (ADP 054-053) XII INCOME TAX	057 058	0 8.749.197	0 1.695.305	0 3.824.571	0 -7.823.155
XIII PROFIT OR LOSS FOR THE PERIOD (ADP 055-059) 1 Profit for the period (ADP 055-059)	059 060	76.490.881 76.490.881	15.189.818 15.189.818	115.206.995 115.206.995	34.819.913 34.819.913
2 Loss for the period (ADP 059-055) DISCONTINUED OPERATIONS (to be filled in by undertakings subject to IFRS only with discontinued operations)	061	0	0	0	0
XIV PRE-TAX PROFIT OR LOSS OF DISCONTINUED OPERATIONS (ADP 063-064)	062	0	0	0	0
1 Pre-tax profit from discontinued operations 2 Pre-tax loss on discontinued operations	063 064	0 0	0 0	0 0	0 0
XV INCOME TAX OF DISCONTINUED OPERATIONS 1 Discontinued operations profit for the period (ADP 062-065)	065 066	0	0	0	0
2 Discontinued operations loss for the period (ADP 065-062) TOTAL OPERATIONS (to be filled in only by undertakings subject to IFRS with discontinued operations)	067
XVI PRE-TAX PROFIT OR LOSS (ADP 055-+062) 1 Pre-tax profit (ADP 068)	068 069	0	0	0	0
2 Pre-tax loss (ADP 068) XVII INCOME TAX (ADP 058+065)	070 071	0	0	0	0
XVIII PROFIT OR LOSS FOR THE PERIOD (ADP 068-071) 1 Profit for the period (ADP 068-071)	072 073
2 Loss for the period (ADP 071-068) APPENDIX to the P&L (to be filled in by undertakings that draw up consolidated annual financial statements)	074
XIX PROFIT OR LOSS FOR THE PERIOD (ADP 076+077) 1 Attributable to owners of the parent	075 076	0 0	0 0	0 0	0 0
2 Attributable to minority (non-controlling) interest STATEMENT OF OTHER COMPRHENSIVE INCOME (to be filled in by undertakings subject to IFRS)	077	0	0	0	0
I PROFIT OR LOSS FOR THE PERIOD II OTHER COMPREHENSIVE INCOME/LOSS BEFORE TAX	078	76.490.881	15.189.818	115.206.995	34.819.913
(ADP 80+ 87)	079	0	0	0	0
III Items that will not be reclassified to profit or loss (ADP 081 to 085) 1 Changes in revaluation reserves of fixed tangible and intangible	080	0	0	0	0
assets 2 Gains or losses from subsequent measurement of equity	081	0	0	0	0
instruments at fair value through other comprehensive income 3 Fair value changes of financial liabilities at fair value through	082 083	0 0	0 0	0 0	0 0
statement of profit or loss, attributable to changes in their credit risk 4 Actuarial gains/losses on the defined benefit obligation	084	0	0	0	0
5 Other items that will not be reclassified	085	0	0	0	0
6 Income tax relating to items that will not be reclassified	086	0	0	0	0
IV Items that may be reclassified to profit or loss (ADP 088 to 095)	087	0	0	0	0
1 Exchange rate differences from translation of foreign operations 2 Gains or losses from subsequent measurement of debt securities at	088	0	0	0	0
fair value through other comprehensive income 3 Profit or loss arising from effective cash flow hedging	089 090	0 0	0 0	0 0	0 0
4 Profit or loss arising from effective hedge of a net investment in a foreign operation	091	0	0	0	0
5 Share in other comprehensive income/loss of companies linked by virtue of participating interests	092	0	0	0	0
6 Changes in fair value of the time value of option	093	0	0	0	0
7 Changes in fair value of forward elements of forward contracts 8 Other items that may be reclassified to profit or loss	094 095	0 0	0 0	0 0	0 0
9 Income tax relating to items that may be reclassified to profit or loss	096	0	0	0	0
V NET OTHER COMPREHENSIVE INCOME OR LOSS (ADP 080+087-	097	0	0	0	0
086 - 096) VI COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (ADP	098	76.490.881	15.189.818	115.206.995	34.819.913
078+097) APPENDIX to the Statement on comprehensive income (to be filled in by undertakings that draw up consolidated statements)
VI COMPREHENSIVE INCOME OR LOSS FOR THE PERIOD (ADP 100+101)	099	76.490.881	15.189.818	115.206.995	34.819.913
1 Attributable to owners of the parent 2 Attributable to minority (non-controlling) interest	100 101	76.490.881 0	15.189.818 0	115.206.995 0	34.819.913 0

STATEMENT OF CASH FLOWS - indirect method for the period 01.01.2021 to 31.12.2021

Submitter: ERICSSON NIKOLA TESLA D.D.			in HRK
Item	ADP code	Same period of the previous year	Current period
1	2	3	4
Cash flow from operating activities
1 Pre-tax profit 2 Adjustments (ADP 003 to 010):	001 002	85.240.078 55.702.026	119.031.566 41.727.844
a) Depreciation	003	42.733.755	45.171.233
b) Gains and losses from sale and value adjustment of fixed tangible and	004	-25.231	-42.742
intangible assets c) Gains and losses from sale and unrealised gains and losses and value
adjustment of financial assets	005	-265.282	-120.671
d) Interest and dividend income	006	-6.031.212	-3.740.809
e) Interest expenses f) Provisions	007 008	1.291.147 0	1.057.558
g) Exchange rate differences (unrealised)	009	4.783.347	-4.650.531
h) Other adjustments for non-cash transactions and unrealised gains and losses	010	13.215.502	4.053.806
I Cash flow increase or decrease before changes in working capital	011	140.942.104	160.759.410
(ADP 001+002)
3 Changes in the working capital (ADP 013 to 016) a) Increase or decrease in short-term liabilities	012 013	136.678.744 -125.472.011	87.130.060 128.942.805
b) Increase or decrease in short-term receivables	014	135.656.777	4.579.988
c) Increase or decrease in inventories	015	125.745.642	-44.869.202
d) Other increase or decrease in working capital	016	748.336	-1.523.531
II Cash from operations (ADP 011+012)	017	277.620.848	247.889.470
4 Interest paid	018	-1.223.923	-1.237.798
5 Income tax paid	019	-406.637	-78.544
A) NET CASH FLOW FROM OPERATING ACTIVITIES (ADP 017 to 019)	020	275.990.288	246.573.128
Cash flow from investment activities
1 Cash receipts from sales of fixed tangible and intangible assets	021	168.735	108.327
2 Cash receipts from sales of financial instruments	022	5.013.292
3 Interest received	023	1.783.760	2.834.010
4 Dividends received	024	58.615	59.371
5 Cash receipts from repayment of loans and deposits 6 Other cash receipts from investment activities	025 026	16.804.102 11.260.833	1.324.523
III Total cash receipts from investment activities (ADP 021 to 026)	027	35.089.337	4.326.231
1 Cash payments for the purchase of fixed tangible and intangible assets	028	-59.252.057	-15.261.833
2 Cash payments for the acquisition of financial instruments	029	0
3 Cash payments for loans and deposits for the period	030	-15.000.000	-1.208.485
4 Acquisition of a subsidiary, net of cash acquired	031	0	0
5 Other cash payments from investment activities	032	0	0
IV Total cash payments from investment activities (ADP 028 to 032)	033	-74.252.057	-16.470.318
B) NET CASH FLOW FROM INVESTMENT ACTIVITIES (ADP 027 +033)	034	-39.162.720	-12.144.087
Cash flow from financing activities
1 Cash receipts from the increase in initial (subscribed) capital 2 Cash receipts from the issue of equity financial instruments and debt	035	0	0
financial instruments	036	0	0
3 Cash receipts from credit principals, loans and other borrowings	037	20.609.226	0
4 Other cash receipts from financing activities V Total cash receipts from financing activities (ADP 035 to 038)	038 039	0 20.609.226	0 0
1 Cash payments for the repayment of credit principals, loans and other	040	-13.795.972	-14.830.171
borrowings and debt financial instruments
2 Cash payments for dividends	041	-65.231.346	-109.165.903
3 Cash payments for finance lease 4 Cash payments for the redemption of treasury shares and decrease in	042	-11.502.388	-11.697.423
initial (subscribed) capital	043	-1.234.760	-14.307.340
5 Other cash payments from financing activities	044
VI Total cash payments from financing activities (ADP 040 to 044)	045	-91.764.466	-150.000.837
C) NET CASH FLOW FROM FINANCING ACTIVITIES (ADP 039 +045)	046	-71.155.240	-150.000.837
1 Unrealised exchange rate differences in respect of cash and cash equivalents	047	-1.671.780	2.040.018
D) NET INCREASE OR DECREASE IN CASH FLOWS (ADP 020+034+046+047)	048	164.000.548	86.468.222
E) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD	049	81.832.522	245.833.070
F) CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD(ADP 048+049)	050	245.833.070	332.301.292

STATEMENT OF CHANGES IN EQUITY for the period from 1.1.2021 to	31.12.2021																	in HRK
Item	ADP code	Initial (subscribed) capital		Capital reserves Legal reserves	Reserves for treasury shares	Treasury shares and holdings	Statutory reserves Other reserves		Revaluation reserves	Attributable to owners of the parent Fair value of financial assets through other comprehensive	Cash flow hedge - effective portion	Hedge of a net investment in a foreign operation -	Other fair value reserves	Exchange rate differences from translation of	Retained profit / loss brought	Profit/loss for the business year	Total attributable to owners of the	Minority (non controlling) interest	Total capital and reserves
						(deductible item)				income (available for sale)		effective portion		foreign operations	forward		parent
1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18 (3 to 6 - 7 + 8 to 17)	19	20 (18+19)
Previous period 1 Balance on the first day of the previous business year	01	133.165.000	0	6.658.250	14.872.546	240.540	0	0		0 0	0		0 0	0	139.344.647	0	293.799.903	0	293.799.903
2 Changes in accounting policies 3 Correction of errors	02 03	0 0	0 0	0 0	0 0	0 0	0 0	0 0		0 0 0 0	0 0		0 0 0 0	0 0	0 0	0 0	0 0	0 0	0 0
4 Balance on the first day of the previous business year (restated) (ADP 01 to 03)	04	133.165.000	0	6.658.250	14.872.546	240.540	0	0		0 0	0		0 0	0	139.344.647	0	293.799.903	0	293.799.903
5 Profit/loss of the period	05	0	0	0	0	0	0	0		0 0	0		0		0	76.490.881	76.490.881	0	76.490.881
6 Exchange rate differences from translation of foreign operations 7 Changes in revaluation reserves of fixed tangible and intangible assets	06	0	0	0	0	0	0	0		0 0	0		0		0	0	0	0	0
8 Gains or losses from subsequent measurement of financial assets at fair value	07	0	0	0	0	0	0	0		0 0	0		0		0	0	0	0	0
through other comprehensive income (available for sale)	08	0	0	0	0	0	0	0		0 0	0		0		0	0	0	0	0
9 Profit or loss arising from effective cash flow hedge 10 Profit or loss arising from effective hedge of a net investment in a foreign	09	0	0	0	0	0	0	0		0 0	0		0		0	0	0	0	0
operation	10	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
11 Share in other comprehensive income/loss of companies linked by virtue of participating interests	11	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
12 Actuarial gains/losses on the defined benefit obligation 13 Other changes in equity unrelated to owners	12 13	0 0	0 0	0 0	0 0	0 0	0 0	0		0 0	0		0 0	0	0 0	0 0	0 0	0 0	0 0
14 Tax on transactions recognised directly in equity	14	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
15 Decrease in initial (subscribed) capital (other than arising from the pre bankruptcy settlement procedure or from the reinvestment of profit)	15	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
16 Decrease in initial (subscribed) capital arising from the pre-bankruptcy settlement procedure	16	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
17 Decrease in initial (subscribed) capital arising from the reinvestment of profit	17	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
18 Redemption of treasury shares/holdings	18	0	0	0	0	1.234.760	0	0		0 0	0		0 0	0	0	0	-1.234.760	0	-1.234.760
19 Payments from members/shareholders 20 Payment of share in profit/dividend	19 20	0 0	0 0	0 0	0 0	0 0	0 0	0 0		0 0 0 0	0 0		0 0 0 0	0 0	0 -65.230.956	0 0	0 -65.230.956	0 0	0 -65.230.956
21 Other distributions and payments to members/shareholders 22 Transfer to reserves according to the annual schedule	21 22	0 0	0 0	0 0	-969.100 0	-969.100 0	0 0	0 0		0 0 0 0	0 0		0 0 0 0	0 0	3.268.314 0	0 0	3.268.314 0	0 0	3.268.314 0
23 Increase in reserves arising from the pre-bankruptcy settlement procedure 24 Balance on the last day of the previous business year reporting period (ADP	23	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
04 to 23) APPENDIX TO THE STATEMENT OF CHANGES IN EQUITY (to be filled in by undertakings that draw up financial statements in accordance with the IFRS)	24	133.165.000	0	6.658.250	13.903.446	506.200	0	0		0 0	0		0 0	0	77.382.005	76.490.881	307.093.382	0	307.093.382
I OTHER COMPREHENSIVE INCOME OF THE PREVIOUS PERIOD, NET OF TAX (ADP 06 to 14)	25	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
II COMPREHENSIVE INCOME OR LOSS FOR THE PREVIOUS PERIOD (ADP 05+25)	26	0	0	0	0	0	0	0		0 0	0		0 0	0	0	76.490.881	76.490.881	0	76.490.881
III TRANSACTIONS WITH OWNERS IN THE PREVIOUS PERIOD RECOGNISED DIRECTLY IN EQUITY (ADP 15 to 23)	27	0	0	0	-969.100	265.660	0	0		0 0	0		0 0	0	-61.962.642	0	-63.197.402	0	-63.197.402
Current period
1 Balance on the first day of the current business year 2 Changes in accounting policies	28 29	133.165.000 0	0 0	6.658.250 0	13.903.446 0	506.200 0	0 0	0 0		0 0 0 0	0 0		0 0 0 0	0 0	77.382.005 0	76.490.881 0	307.093.382 0	0 0	307.093.382 0
3 Correction of errors	30	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
4 Balance on the first day of the current business year (restated) (AOP 28 to 30) 5 Profit/loss of the period	31 32	133.165.000 0	0 0	6.658.250 0	13.903.446 0	506.200 0	0 0	0 0		0 0 0 0	0 0		0 0 0	0	77.382.005 0	76.490.881 115.206.995	307.093.382 115.206.995	0 0	307.093.382 115.206.995
6 Exchange rate differences from translation of foreign operations	33	0	0	0	0	0	0	0		0 0	0		0		0	0	0	0	0
7 Changes in revaluation reserves of fixed tangible and intangible assets	34	0	0	0	0	0	0	0		0 0	0		0		0	0	0	0	0
8 Gains or losses from subsequent measurement of financial assets at fair value through other comprehensive income (available for sale)	35	0	0	0	0	0	0	0		0 0	0		0		0	0	0	0	0
9 Profit or loss arising from effective cash flow hedge	36	0	0	0	0	0	0	0		0 0	0		0		0	0	0	0	0
10 Profit or loss arising from effective hedge of a net investment in a foreign operation	37	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
11 Share in other comprehensive income/loss of companies linked by virtue of participating interests	38	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
12 Actuarial gains/losses on the defined benefit obligation 13 Other changes in equity unrelated to owners	39	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
14 Tax on transactions recognised directly in equity	40 41	0 0	0 0	0 0	0 0	0 0	0 0	0 0		0 0 0 0	0 0		0 0 0 0	0 0	0 0	0 0	0 0	0 0	0 0
15 Decrease in initial (subscribed) capital (other than arising from the pre bankruptcy settlement procedure or from the reinvestment of profit)	42	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
16 Decrease in initial (subscribed) capital arising from the pre-bankruptcy settlement procedure	43	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
17 Decrease in initial (subscribed) capital arising from the reinvestment of profit	44	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
18 Redemption of treasury shares/holdings 19 Payments from members/shareholders	45 46	0 0	0 0	0 0	25.000.000 0	14.307.340 0	0 0	0 0		0 0 0 0	0 0		0 0 0 0	0 0	-25.000.000 0	0 0	-14.307.340 0	0 0	-14.307.340 0
20 Payment of share in profit/dividend	47	0	0	0	0	0	0	0		0 0	0		0 0	0	-109.162.418	0	-109.162.418	0	-109.162.418
21 Other distributions and payments to members/shareholders 22 Carryforward per annual plane	48 49	0 0	0 0	0 0	-2.391.610 0	-2.391.610 0	0 0	0 0		0 0 0 0	0 0		0 0 0 0	0 0	4.405.139 76.490.881	0 -76.490.881	4.405.139 0	0 0	4.405.139 0
23 Increase in reserves arising from the pre-bankruptcy settlement procedure 24 Balance on the last day of the current business year reporting period (ADP	50	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
31 to 50) APPENDIX TO THE STATEMENT OF CHANGES IN EQUITY (to be filled in by undertakings that draw up financial statements in accordance with the IFRS)	51	133.165.000	0	6.658.250	36.511.836	12.421.930	0	0		0 0	0		0 0	0	24.115.607	115.206.995	303.235.758	0	303.235.758
I OTHER COMPREHENSIVE INCOME FOR THE CURRENT PERIOD, NET OF TAX (ADP 33 to 41)	52	0	0	0	0	0	0	0		0 0	0		0 0	0	0	0	0	0	0
II COMPREHENSIVE INCOME OR LOSS FOR THE CURRENT PERIOD (ADP 32 do 52)	53	0	0	0	0	0	0	0		0 0	0		0 0	0	0	115.206.995	115.206.995	0	115.206.995
III TRANSACTIONS WITH OWNERS IN THE CURRENT PERIOD RECOGNISED DIRECTLY IN EQUITY (ADP 42 to 50)	54	0	0	0	22.608.390	11.915.730	0	0		0 0	0		0 0	0	-53.266.398	-76.490.881	-119.064.619	0	-119.064.619

Cost structure in Statement of comprehensive income (FS form) is according to function and the presentation is different from TFI-POD forms where cost is presented by nature. Total amount of Cost of Sales, Selling, Administrative and Other operating expenses equals to amount of AOP 007 Operating expenses.

1. Balance Sheet P&L Additionally, both categories Borrowings and Lease liabilities in Statement of Financial position are shown under AOP 115 Liabilities to bank and other financial institutions. Within the category Equity in Statement of financial position total amount of Retained earnings is indicated in TFI-POD form under AOP 083 Retaind profit/loss brought forward and 086 Profit or Loss for the business year. Within the category Current liabilities in Statement of financial position total amount of Trade and other payables and Income tax payable is indicated in TFI-POD in AOP 117 Liabilities to suppliers,119 Liabilities to employees,120 Taxes, contributions and similar liabilities. Within the category Current liabilities in Statement of financial position total amount of Accrued charges and deferred revenue and Contract liabilities is indicated in TFI-POD form under AOP 116 Liabilities for advance payments, 124 Accruals and deferred income. There are no material events arising after the balance sheet date which are not reflected in the profit and loss account or balance sheet. APPENDIX (Reconciliation of the differences arrising due to structure and classification of the positions in TFI-POD in XLS format compared to classification of the positions in the audited annual report in PDF): Within the category Non-current assets in Statement of financial position total amount of Loans and receivables is indicated in TFI-POD form under AOP 023 Loans, deposits, etc. to undertakings within the group, 028 Loans, deposits, etc. given,034 Customer receivables,035 Other receivables. Within the category Current assets in Statement of financial position total amount of Other receivables, Income tax receivables is indicated in TFI-POD form under AOP 051 Receivables from government and other institutions,052 Other receivables, 061 Loans, deposits, etc. given. Additionally, within the category Non-current liabilities in Statement of Financial position total amount of Borrowings and Lease liabilities are shown under AOP 103 Liabilities to bank and other financial institutions The Company did not have any arrangements that are not included in the balance sheet, where the risks or benefits arising from such arrangements are material. Also, within the category Current liabilities in Statement of financial position total amount of Provisions is indicated in TFI-POD form under AOP 123 Other short-term liabilities.

The company Telefonaktiebolaget LM Ericsson (Sweden, Torshamnsgatan 21, SE-164 83 Stockholm) prepares the consolidated financial statements for the larger Group of companies, in which Ericsson Nikola Tesla Group is included as an associate member of Ericsson.

HRK 000 15.449 5.594 -12.646 8.397 8.397 5.594 -12.646 8.397 Tax credited to the Income statement Tax charged to the Income statement As at 31 December 2021 As at 1 January 2020 Tax credited to the Income statement Tax charged to the Income statement As at 31 December 2020 As at 1 January 2021

There were no shares subscribed during the financial year within the limits of the authorised capital. The Company has no participation certificates, convertible debentures, warrants, options or similar securities or rights.

Those consolidated reports are available at www.ericsson.com/en/investors/financial-reports.

Provision for deferred tax is calculated annualy, at balance sheet date 31 December. Movement in deferred tax balances during reporting period were as

Accounting policies have not been changed in relation to previous reporting period. In the reporting period there were no individual items of income or expenditure of exceptional size or incidence. The average number of employees during the reporting period is 2615 (Q1-Q4 2020: 2524). The Company does not categorise employees. No cost of salaries was capitalised in the reporting period. Financial commitments in term of guarantees that are not included in the balance sheet are not material and Management Board believes that possibility of any outflow is remote. The Company has no commitments concerning pensions that are in scope of IAS 19. The Company has no debt falling due after more than five years. At the balance sheet date, the Company does not have debts covered by valuable securities/insurance. Issuer's name, registered office (address), legal form, country of establishment, entity's registration number are disclosed in the sheet General data of this

297.668 333.984 Balances with related parties 31.12.2021 31.12.2020 HRK 000 HRK 000 80.178 97.933 5.797 29.759 Purchases Receivable Payable

'000 kn '000 kn '000 kn '000 kn '000 kn '000 kn '000 kn '000 kn '000 kn '000 kn '000 kn '000 kn Segment sales revenue 920.767 938.021 576.430 455.870 19.715 15.244 5.714 8.078 0 0 1.522.626 1.417.214 Operating profit 90.899 76.921 57.937 38.195 1.238 792 435 298 -39.965 -33.714 110.544 82.492 Transactions with related parties: 31.12.2021 31.12.2020 HRK 000 HRK 000 923.776 931.384 Sales

a) Explanation of business events relevant to understanding changes in the statement of financial position and financial performance are published in Press info/Management letter.

The financial statements have been prepared in accordance with International Financial Reporting Standards adopted by the European Union (IFRSs), on the historical cost basis, with the exception of financial instruments which are carried at fair value through profit or loss. Policies have been consistently

Last issued annual financial statements are available at ZSE and as well at www.ericsson.hr.

b)

1. 2.

document.

1. 4.

2. 6.

7.

8.

folows:

1. 1. 1. 1. 1. and 14. 15.

The Company has no participating interest.

The Company has no shares in companies having unlimited liability.

16.

www.ericsson.hr/en/reports c)

applied to all the periods presented.

account or balance sheet

of their number and the rights they confer

available 16. the nature and business purpose of the undertaking's arrangements that are not included in the balance sheet and the financial impact on the undertaking of those arrangements, provided that the risks or benefits arising from such arrangements are material and in so far as the disclosure of such risks or benefits is necessary for the purposes of assessing the financial position of the undertaking 17. the nature and the financial effect of material events arising after the balance sheet date which are not reflected in the profit and loss

1. the existence of any participation certificates, convertible debentures, warrants, options or similar securities or rights, with an indication 12. the name, registered office and legal form of each of the undertakings of which the undertaking is a member having unlimited liability 13. the name and registered office of the undertaking which draws up the consolidated financial statements of the largest group of undertakings of which the undertaking forms part as a controlled group member 14. the name and registered office of the undertaking which draws up the consolidated financial statements of the smallest group of undertakings of which the undertaking forms part as a controlled group member and which is also included in the group of undertakings referred to in point 13 15. the place where copies of the consolidated financial statements referred to in points 13 and 14 may be obtained, provided that they are

movement in those balances during the financial year 9. the name and registered office of each of the undertakings in which the undertaking, either itself or through a person acting in their own name but on the undertaking's behalf, holds a participating interest, showing the proportion of the capital held, the amount of capital and reserves, and the profit or loss for the latest financial year of the undertaking concerned for which financial statements have been adopted; the information concerning capital and reserves and the profit or loss may be omitted where the undertaking concerned does not publish its balance sheet and is not controlled by another undertaking 10. the number and the nominal value or, in the absence of a nominal value, the accounting par value of the shares subscribed during the financial year within the limits of the authorised capital

the total cost of employees during the year broken down into the amount directly debiting the costs of the period and the amount capitalised on the value of the assets during the period, showing separately the total amount of net salaries and the amount of taxes, contributions from salaries and contributions on salaries 8. where a provision for deferred tax is recognised in the balance sheet, the deferred tax balances at the end of the financial year, and the

1. average number of employees during the financial year 7. where, in accordance with the regulations, the undertaking capitalised on the cost of salaries in part or in full, information on the amount of

the group or company linked by virtue of participating interest shall be disclosed separately 4. the amount and nature of individual items of income or expenditure which are of exceptional size or incidence 5. amounts owed by the undertaking and falling due after more than five years, as well as the total debts of the undertaking covered by valuable security furnished by the undertaking, specifying the type and form of security

1. adopted accounting policies (only an indication of whether there has been a change from the previous period) 3. the total amount of any financial commitments, guarantees or contingencies that are not included in the balance sheet, and an indication of the nature and form of any valuable security which has been provided; any commitments concerning pensions of the undertaking within

f) in the notes to quarterly periods financial statements, in addition to the information stated above, information in respect of the following matters shall be disclosed: 1. undertaking's name, registered office (address), legal form, country of establishment, entity's registration number and, if applicable, the indication whether the undertaking is undergoing liquidation, bankruptcy proceedings, shortened termination proceedings or extraordinary administration

period as in the latest annual financial statements or, in the case where the accounting policies have changed, a description of the nature and effect of the changes (item 16.A (a) IAS 34 - Interim financial reporting) d) a description of the financial performance in the case of the issuer whose business is seasonal (items 37 and 38 IAS 34 - Interim financial reporting) e) other comments prescribed by IAS 34 - Interim financial reporting

information published in the last annual financial statement is updated (items 15 to 15C IAS 34 - Interim financial reporting) b) information on the access to the latest annual financial statements, for the purpose of understanding information published in the notes to financial statements drawn up for the semi-annual reporting period c) a statement explaining that the same accounting policies are applied while drawing up financial statements for the semi-annual reporting

a) explanation of business events relevant to understanding changes in the statement of financial position and financial performance for the reporting semi-annual period of the issuer with respect to the last business year: information is provided regarding these events and relevant

Personal identification number (OIB): 84771175 Reporting period: Q4 2021 Notes to financial statements for quarterly periods include:

Name of the issuer: ERICSSON NIKOLA TESLA D.D.

NOTES TO FINANCIAL STATEMENTS - TFI (drawn up for quarterly reporting periods)