Ericsson Nikola Tesla d.d. — Management Reports 2015

Oct 29, 2015

Ericsson Nikola Tesla D.D.

The Management Report on the Group and the Company Ericsson Nikola Tesla business performance and comments on the financial results for the nine months 2015

Highlights:

• Sales revenues: MHRK 967.6
• Gross margin: 12.9 %
• Operating profit: MHRK 61.2
• Net profit: MHRK 60.9
• Cash flow from operating activities: MHRK 138.1

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

"Sales revenues in the first nine months 2015 increased by 6.2% year-over-year. A significant increase in revenue was recorded in Ericsson market, thus neutralizing revenue decrease in other markets. During 2015, Ericsson Nikola Tesla Group employed 410 new professionals.

Almost all the key financial performance indicators show positive trends. Operating profit increased by 10% yearover-year to MHRK 61.2, while net profit increased by 3% to MHRK 60.9. Gross margin is lower year-over-year, as a result of change in business mix (increase in services to Ericsson) and a continuous price pressure. This change in business mix results in lower margin, however, at the same time it reduces exposure to business and operating risks. Our continuous focus on cost efficiency brings good results. Sales and administrative costs decreased by 11% year-over-year, thus ensuring a solid operating profit growth. A strong cash flow from operating activities of MHRK 138.1, allowed build-up of the total cash balances, including short term financial assets to MHRK 195.8. The working capital efficiency, measured by the performance indicator Working Capital Days (WCD) is 33 days. The cash conversion rate is at high 138%.

In the domestic market, together with the intensive activities with our key customers in the operator segment, I believe that the role of Ericsson Nikola Tesla is recognized in the informatization of national healthcare system and the realization of projects that ensure a more efficient management at the state administration level. Sales revenues decreased year-over-year, because our customers in the radio access network and eSystems segments postponed their investments or delayed contract signing. As far as the export markets are concerned, new business opportunities, primarily in Bosnia & Herzegovina, are expected in the next period. In CIS market, marketing and sales activities are ongoing on several projects in the telecom, as well as in the Industry & Society segment (eHealth).

End of September, we marked the 15th Anniversary of Ericsson Nikola Tesla Summer Camp. This project is one of the successful examples of bringing together education and economy, launched in collaboration with the Faculty of Electrical Engineering and Computing in 2001. To this day, more than 600 students participated in the Summer Camp and together with the support of their mentors from Croatia and abroad, they realized more than 400 projects. In this way, we find top talents and strengthen our position in a demanding global market, and at the same time, we provide an opportunity for students to work in teams on innovative high-tech projects.

During the third quarter we launched a new cycle of strategic planning for the period up to 2018, by analyzing the current situation in all relevant markets and trends related to the future developments in the ICT industry. Our goal is to strengthen the position in strategic business segments (4G/LTE, OSS/BSS, TV & Media, Managed Services, Industry & Society). Moreover, on the Ericsson market, we want to keep and extend our responsibilities, while maintaining a high quality of delivered services.

With our strategic initiatives, we are well positioned to create values to our customers in a transforming ICT market."

Financial summary:

• Sales revenues amount to MHRK 967.6 (first nine months 2014: MHRK 911.5), 6.2% increase year-overyear. Of the total sales revenues, the domestic market accounts for 21.2%, services to Ericsson account for 60.4%, while other export markets participate with 18.4%.
• Sales in the network segment amounts to MHRK 438.8 (45.4% of the total sales revenue), services segment amounts to MHRK 496.9 (51.3% of the total sales revenue), and support solution segment accounts for MHRK 31.9 (3.3% of the total sales revenue).
• Gross profit amounts to MHRK 124.6 (first nine months 2014: MHRK 122.3), an increase by 2% year-overyear. Gross margin decreased to 12.9% (first nine months 2014: 13.4%), primarily due to business mix changes.
• Distribution and administrative expenses decreased by 11% year-over-year and amount to MHRK 60.1 (first nine months 2014: MHRK 67.5).
• Operating profit increased by 10% year-over-year and amounts to MHRK 61.2 (first nine months 2014: MHRK 55.7).
• Net finance income is MHRK 0.1 (first nine months 2014: MHRK 3.3) primarily due to lower interest income and net foreign exchange losses on cash and short-term financial assets as a result of HRK appreciation.
• Net profit increased by 3% year-over-year and amounts to MHRK 60.9 (first nine months 2014: MHRK 58.9). Return on Sales (ROS) is 6.3% (first nine months 2014: 6.5%).

• Cash flow from operating activities is MHRK 138.1 (first nine months 2014: MHRK 133.3). The cash conversion rate is at 138%. WCD is 33 days.

• Total cash and cash equivalents, including short term financial assets, as at 30 September 2015 amount to MHRK 195.8 (31.5% of the total assets), while at the end of 2014 amounted to MHRK 231.0 (33.0% of the total assets).

• The Company has a lean balance sheet with total assets of MHRK 621.5. The equity ratio is at solid 44.9%.
• With related parties, the transactions were as follows: sales of products and services amounted to MHRK 610.8 (first nine months 2014: MHRK 430.8), while the purchase of products and services amounted to MHRK 199.2 (first nine months 2014: MHRK 265.7).
• As at 30 September 2015, balances outstanding with related parties were as follows: receivables amounted to MHRK 105.4 (end 2014: MHRK 86.6), and payables MHRK 37.5 (end 2014: MHRK 46.5).

Business situation in major markets

In the domestic market sales revenues amounted to MHRK 205.6, 13.3% decrease year-over-year.

During Q3, the collaboration with the strategic partner Vipnet continued on the modernization of radio access network and transport telecom network, as well as on increasing the capacity of 3G and 4G technology. Further testing is ongoing, regarding new functionalities in various core and radio access network segments that contribute to the increased quality and new services to end users.

With Hrvatski Telekom (HT) we are working on strategic projects related to development and transformation of network and services, and we continue to provide the services of telecommunications infrastructure build and maintenance.

With Tele2, activities are ongoing on software upgrading and finalizing the project of enhancing functional reliability of core network infrastructure. The focus is placed on further enhancing the capacities of transmission network in the segments of microwave connections and fiber technologies.

In the business segment of ICT solutions for Industry & Society, a two-year contract was signed regarding maintenance and upgrades of CEZIH – Central Healthcare Information System of the Republic of Croatia. Furthermore, the contract was signed with Hrvatska elektroprivreda (HEP) relating to maintenance of communication network. For the Ministry of the Interior of the Republic of Croatia for the need of Operational and communication center we successfully implemented the solution for assistance in emergency situations.

In export markets (except for Ericsson market), sales revenues amount to MHRK 177.6, 26.3% decrease yearover-year. The unfavorable political and economic situation impacts the operators' investment.

In Southeast Europe (Bosnia and Herzegovina, Montenegro and Kosovo) sales revenues decreased by 2.7% yearover-year to MHRK 123.2.

In Bosnia and Herzegovina, the collaboration with BH Telecom and HT Mostar (HT Eronet) continues in the segment of modernizing fixed and mobile networks with an emphasis on mobile broadband internet access.

With HT Eronet, a contract was signed related to the Evolved Packet Core, a technology solution that ensures greater capacities and the development of new services.

PRESS INFO October 29, 2015

In Montenegro market, with Crnogorski Telekom, we continue our successful collaboration on expanding and upgrading the radio access network (2G, 3G and LTE). During Q3, the Mobile Positioning System (MPS), which enables positioning of the mobile subscribers who are calling the Emergency call number 112, was implemented. For the Ministry of the Interior of Montenegro we successfully implemented a new solution for emergency calls 112 based on Coordcom solution.

In Kosovo market, with the operator IPKO, we continued collaboration in the segment of radio access network expansion and the upgrade of microwave and 2G/3G/4G radio networks.

In CIS market, sales revenues amount to MHRK 54.4, 52.4% decrease year-over-year. The marketing and sales activities are ongoing on several projects in the telecom, as well as in the Industry & Society segment (eHealth).

In Ericsson market, sales revenues amounted to MHRK 584.4, an increase by 34.9% year-over-year. Ericsson Nikola Tesla Servisi d.o.o. (managed services) contributed with MHRK 125.8.

Within the Ericsson Nikola Tesla Research and Development Centre (R&D), along with activities on numerous development projects, the transfer of competencies and responsibilities for several work domains was finished. We should highlight the software application development within the Radio Development Unit. In other Development Units (PDU Mobile Core, PDU User Data Management, PDU Infrastructure & Hardware and BUGS Global legacy & Harvest Network) all the activities were carried out successfully and according to plan.

End of September, a series of meetings were held between R&D Development Units with the representatives of Ericsson Product Development Units. Based on the detailed business performance analysis, at the final meeting held in Zagreb, the quality of work and the current high ranking of our center were highlighted. The results confirm continuity of excellence and boost the future work and development of collaboration.

Service Delivery Center experts have been engaged in numerous projects for the following customers: Base Belgium, Deutsche Telekom Germany, EE Great Britain, Translink Netherlands, Vodafone Czech Republic, Vodafone Ireland, Swisscom Switzerland, P4 Poland. We can highlight the activities connected with the IPTV project for Vodafone Ireland, Order care project for Translink Netherlands, VoLTE and WiFi projects for EE Great Britain, PostLUX Luxembourg and Vodafone Czech Republic.

The Centre's experts also provided consulting services and services of configuration and dimensioning for Orange Botswana, Vodafone Netherlands, T-mobile Czech Republic, Turkcell Turkey and MTN and Zain Sudan. There is intensive work ongoing on developing and implementing software tools for mobile network management and optimization, such as: Smart Laptop, E/// Design Optimization Service, Smart Rollout Support, Rehoming Automation Management Tool, Radio Network Proposal Tool, etc.

The Global Competence Domain for RAN & OSS has ongoing activities on Facebook project. The responsibility for RAN network e2e optimization has been obtained.

Other information

Ericsson Nikola Tesla's major shareholders (as at 30 September 2015)

	Number of	% of share
	shares	capital
Telefonaktiebolaget LM Ericsson	653,473	49.07
Hypo Alpe-Adria-Bank d.d. / Raiffeisen Mandatory Pension Fund, B category	123,514	9.28
Societe Generale-Splitska banka d.d. / Erste Plavi Mandatory Pension Fund, B category	32,961	2.48
Hypo Alpe-Adria-Bank d.d. / PBZ Croatia osiguranje Mandatory Pension Fund, B category	27,523	2.07
PBZ d.d. / State Street client account	23,542	1.77
PBZ d.d. / The Bank of New York as custodian	22,367	1.68
Zagrebačka banka d.d. / Custodian client account for Unicredit Bank Austria AG	17,320	1.30
Zagrebačka banka d.d. / State Street Bank and Trust Company, Boston	12,350	0.93
PBZ d.d. / Custodian Client Account	10,988	0.83
Hypo Alpe-Adria-Bank d.d. / Raiffeisen Voluntary Pension Fund	7,934	0.60
Other shareholders	399,678	30.00

Information on share price in Q3 2015:

Highest (HRK)	Lowest (HRK)	Closing (HRK)	Market cap. (in MHRK)
1,177.99	1,030.01	1,051.01	1,399.6

PRESS INFO October 29, 2015

Ericsson Nikola Tesla d.d. Krapinska 45 Zagreb

OIB: 84214771175 Tax No.: 03272699

Pursuant to the Articles 407 to 410 of the Capital Market Law (Official Gazette 88/08 and 146/08) 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 nonconsolidated 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 1 Jan 2015 to 30 Sep 2015 present a true and fair view of the financial position of the Company and of its financial performance and its cash flows in compliance with applicable accounting standards.

Managing Director:

Gordana Kovačević, MSc

For additional information, please contact:

Snježana Bahtijari Orhideja Gjenero Company Communication 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 Phone: + 385 1 365 4556 Phone: +385 1 365 4431 Mobile: +385 91 365 4556 Mobile: +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 performance, please visit: http://www.ericsson.hr

Communication Ericsson Nikola Tesla

ENCLOSURE 1
Reporting period:	1.1.2015.	to	30.09.2015
	Quarterly Financial Report TFI-POD
Tax number (MB): 03272699
080002028 Registration number (MBS):
Personal identification 84214771175
number (OIB): Issuer: ERICSSON NIKOLA TESLA D.D. ZAGREB
Postal code and location: 10000	ZAGREB
Street and number: Krapinska 45
E-mail: etk.company@ericsson.com
Internet address: www.ericsson.hr
Code and city / municipality ZAGREB 133
Code and county GRAD ZAGREB 21			Number of employees: (at the end of year)	1.913
Consolidated Report NO			Business activity code:	2630
Entities in consolidation (according to IFRS)	Registered seat:		Tax number (MB):
Book-keeping office: Contact person Tatjana Ricijaš
(Name and surname of contact person)
Telephone: +385 (0)1 365 3343		Telefaks:	+385 (0)1 365 3174
E-mail: tatjana.ricijas@ericsson.com
Name and surname: Kovačević Gordana (authorized representatives)
Documents to be published: 1. Financial Statements (Balance Sheet, Income statement, Cash Flow Statement, Statement of Changes in Equity) 2. Management Commentary Statement with notes 3. Responsibility of the Management for the preparation of the financial statements
	(seal)		(signature of authorized representative)

Balance Sheet

as at 30 September 2015

Issuer: Ericsson Nikola Tesla d.d.
Item	AOP	Previous period	Current period
1	2	3	4
A) RECEIVABLES FOR REGISTARED UNPAID CAPITAL	001
B) NON CURRENT ASSETS (003+010+020+029+033)	002	150.274.226	153.228.834
I. INTANGIBLE ASSETS (004 do 009)	003	1.295.766	863.230
1. Research & Development expenditure	004
2. Patents, licences, royalties, trade marks, software&similar rights	005	1.295.766	863.230
3. Goodwill	006	0	0
4. Prepayments for intangible assets	007
5. Intangible assets under construction	008
6. Other intangible assets	009
II. PROPERTY, PLANT AND EQUIPMENT (011 do 019)	010	129.752.400	133.093.776
1. Land	011	15.605.344	15.605.344
2. Property	012	30.024.740	28.294.796
3. Plants and equipment	013	76.182.440	82.127.545
4. Tools, plants&vehicles	014	5.261.361	4.329.719
5. Biological asset	015
6. Prepayments for tangible assets	016
7. Assets under construction	017	2.579.181	2.642.874
8. Other tangible assets	018	99.334	93.497
9. Investments property	019
III. FINANCIAL ASSETS (021 do 028)	020	7.436.826	7.386.054
1. Investments in subsidiaries	021	73.385	73.385
2. Loans to subsidiaries	022
3. Participating interests (stakes)	023
4. Loans to participating interest	024
5. Investments in securities	025
6. Loans & deposits	026	7.363.441	7.312.669
7. Other non-current financial assets	027
8. Investment accounted by equity method	028
IV. RECEIVABLES (030 do 032)	029	11.789.235	11.885.774
1. Receivables from subsidiaries	030	4.133.330	2.933.353
2. Receivables from credit sales	031	3.352.403	4.693.389
3. Other receivables	032	4.303.502	4.259.032
V. DEFERRED TAX ASSETS	033	0	0
C) CURENT ASSETS (035+043+050+058)	034	526.177.059	427.102.612
I. INVENTORIES (036 do 042)	035	21.128.206	27.293.105
1. Raw materials & consumables 2. Work in progress	036	5.185	3.222
3. Products	037	21.104.523	27.271.385
4. Merchandise	038 039
5. Prepayments for inventories	040	18.498	18.498
6. Other available-for-sale assets	041
7. Biological asset	042
II. RECEIVABLES (044 do 049)	043	266.344.092	211.303.936
1. Receivables for trade debt of subsidiaries	044	84.860.265	103.410.808
2. Trade receivables	045	178.882.847	106.757.947
3. Receivables for trade debts of participating entities	046
4. Amounts receivable from employees	047
5. Receivables from government agencies	048	739.029	1.079.202
6. Other receivables	049	1.861.951	55.979
III. FINANCIAL ASSETS (051 do 057)	050	56.598.608	27.891.348
1. Investments in subsidiaries	051
2. Loans to subsidiaries	052	12.518.291
3. Participating interests (stakes)	053
4. Loans to participating interest	054
5. Investments in securities	055	44.080.317	27.891.348
6. Loans & deposits	056
7. Other financial assets	057
IV. CASH AND CASH EQUIVALENTS	058	182.106.153	160.614.224
D) PREPAYMENTS AND ACCRUED INCOME	059	1.931.795	7.720.086
E) TOTAL ASSETS (001+002+034+059)	060	678.383.080	588.051.532
F) OFF-BALANCE SHEET ITEMS	061

EQUITY AND LIABILITES
A) EQUITY (063+064+065+071+072+075+078)	062	329.657.396	270.147.205
I. SHARE CAPITAL	063	133.165.000	133.165.000
II. CAPITAL RESERVES	064
III. RESERVES FROM PROFIT (066+067-068+069+070)	065	22.942.695	22.942.695
1. Legal reserves	066	6.658.250	6.658.250
2. Reserves for treasury shares	067	24.746.708	24.746.708
3. Treasury shares and stakes (less)	068	8.462.264	8.462.264
4. Statutory reserves	069
5. Other reserves	070
IV. REVALUATION RESERVES	071
V. RETAINED EARNINGS (073-074)	072	90.799.764	56.221.186
1. Retained earnings	073	90.799.764	56.221.186
2. Loss brought forward	074
VI. PROFIT OR LOSS FOR THE FINANCIAL YEAR (076-077)	075	82.749.938	57.818.324
1. Profit for the financial year	076	82.749.938	57.818.324
2. Loss for the financial year	077
VII. MINORITY INTEREST	078
B) PROVISIONS (080 do 082)	079	0	0
1. Provisions for redundancy costs	080
2. Provisions for tax obligations	081
3. Other provisions	082
C) NON-CURRENT LIABILITIES (084 do 092)	083	9.469.071	9.579.303
1. Amounts payable to subsidiaries	084	4.133.330	4.133.330
2. Liabilities for loans, deposits and other	085
3. Liabilities towards banks and other financial institutions	086
4. Amounts payable for prepayment	087
5. Trade payables	088
6. Amounts payable for securities	089
7. Liabilities toward participating interests	090
8. Other non-current liabilities	091	5.335.741	5.445.973
9. Deffered tax	092
D) CURRENT LIABILITIES (094 do 105)	093	198.862.924	165.204.251
1. Amounts payable to subsidiaries	094	62.755.317	50.887.877
2. Liabilities for loans, deposits and other	095
3. Liabilities towards banks and other financial institutions	096	0	0
4. Amounts payable for prepayment	097
5. Trade payables	098	45.195.377	28.251.479
6. Amounts payable for securities	099
7. Liabilities toward participating interests	100
8. Amounts payable to employees	101	67.949.062	64.979.144
9. Liabilities for taxes and contributions	102	22.963.168	21.085.751
10. Dividend payables	103
11. Liabilities directly associated with the assets classified as held for sale	104
12. Other current liabilities	105
E) ACCRUED CHARGES AND DEFERRED REVENUE	106	140.393.689	143.120.772
F) TOTAL EQUITY AND LIABILITIES (062+079+083+093+106)	107	678.383.080	588.051.532
G) OFF-BALANCE SHEET ITEMS	108
ANNEX TO THE BALANCE SHEET (to be filled in by entrepreneur submitting consolidated financial report)
A) CAPITAL AND RESERVES
1. Attributable to equity holders of the parent company's capital	109
2. Attributable to minority interest	110

Note 1.: APPENDIX TO THE BALANCE SHEET (to be filled in by entites who submitting consolidated financial statements).

for the period 01 January 2015 to 30 September 2015 INCOME STATEMENT

Issuer: Ericsson Nikola Tesla d.d.	AOP
Item		Previous period		Current period
1	2	Cumulative 3	Quarter 4	Cumulative 5	Quarter 6
I. OPERATING INCOME (112+113)	111	908.821.057	256.141.004	948.672.071	288.174.132
1. Sales revenue	112	895.935.176	252.327.440	936.151.461	284.499.546
2. Other operating income	113	12.885.882	3.813.564	12.520.610	3.674.585
II. OPERATING EXPENSES (115+116+120+124+125+126+129+130) 1. Changes in inventories of finished products and work in progress	114 115	856.818.391 7.964.611	249.329.990 -3.107.203	890.968.445 -6.166.862	279.303.564 -2.635.255
2. Raw material and consumables used (117 do 119)	116	415.146.135	106.384.361	443.823.305	131.441.493
a) Cost of raw materials & consumables	117	213.174.659	36.067.111	151.978.024	27.769.476
b) Cost of goods sold	118
c) Other costs 3. Staff costs (121 do 123)	119 120	201.971.476 366.865.461	70.317.251 122.670.881	291.845.280 392.282.714	103.672.017 131.962.956
a) Net salaries	121	177.521.181	59.018.859	180.179.257	60.923.156
b) Employee income tax and contributions	122	137.456.074	45.698.776	156.416.964	52.888.525
c) Employer's contributions	123	51.888.206	17.953.246	55.686.493	18.151.275
4. Depreciation and amortisation expense	124	33.669.414	11.769.894	36.944.824	12.832.147
5. Other costs 6. Impairment losses (127+128)	125 126	24.397.277 4.912.012	7.093.965 2.900.111	21.507.490 1.497.548	4.874.356 772.900
a) non-current assets (except financial assets)	127
b) current asssets (except financial assets)	128	4.912.012	2.900.111	1.497.548	772.900
7. Provisions	129
8. Other operating expenses III. FINANCIAL INCOME (132 do 136)	130 131	3.863.481 5.349.250	1.617.980 2.988.644	1.079.426 2.596.017	54.968 1.300.039
1. Interest, foreign exhange gains, dividends and other income from related parties	132
2. Interest, foreign exchange gains, dividends and other income from non-related and other
entities	133	4.802.156	2.947.158	2.522.135	1.300.039
3. Income from associates and ownership interests	134
4. Unrealized gains 5. Other financial income	135 136	547.094	41.486	73.882
IV. FINANCIAL EXPENSES (138 do 141)	137	1.497.570	817	2.481.319	47.023
1. Interest, foreign exchange losses and other expenses with related parties	138
2. Interest, foreign exchange differences and other expenses with non-related and other	139	1.497.570	817	2.481.319	47.023
entities
3. Unrealized losses 4. Other financial expenses	140 141
V. SHARE OF INCOME OF ASSOCIATES	142
VI. SHARE OF LOSS OF ASSOCIATES	143
VII. EXTRAORDINARY - OTHER INCOME	144
VIII. EXTRAORDINARY - OTHER EXPENSES	145
IX. TOTAL INCOME (111+131+142 + 144) X. TOTAL EXPENSES (114+137+143 + 145)	146	914.170.308 858.315.961	259.129.648 249.330.806	951.268.088 893.449.764	289.474.171 279.350.587
XI. PROFIT OR LOSS BEFORE TAX (146-147)	147 148	55.854.346	9.798.842	57.818.324	10.123.584
1. Profit before tax (146-147)	149	55.854.346	9.798.842	57.818.324	10.123.584
2. Loss before tax (147-146)	150	0	0	0	0
XII. INCOME TAX EXPENSE	151
XIII. PROFIT OR LOSS FOR THE PERIOD (148-151)	152	55.854.346	9.798.842	57.818.324	10.123.584
1. Profit for the period (149-151) 2. Loss for the period (151-148)	153 154	55.854.346 0	9.798.842 0	57.818.324 0	10.123.584 0
ANNEX TO THE PROFIT AND LOSS ACCOUNT (to be filled in by entities submitting consolidated financial statements)
XIV. PROFIT OR LOSS FOR THE PERIOD
1. Attributable to owners of the company	155
2. Attributable to non-controlling interests	156
STATEMENTS OF COMPREHENSIVE INCOME (to be filled by entities who work in compliance with IFRS) I. PROFIT OR LOSS FOR THE PERIOD (= 152)	157	55.854.346	9.798.842	57.818.324	10.123.584
II. OTHER COMPREHENSIVE INCOME /LOSS BEFORE TAX (159 do 165)	158	0	0	0	0
1. Exchange differences arising from foreign operations	159
2. Revaluation of non-current assets and intangible assets	160
3. Gains or loss available for sale investments	161
4. Gains or loss on net movement on cash flow hedges	162
5. Gains or loss on net investments hedge	163
6. Share of the other comprehensive income/loss of associates	164
7. Acturial gain / loss on post employment benefit obligations	165
III. TAX ON OTHER COMPREHENSIVE INCOME OF THE PERIOD IV. NET OTHER COMPREHENSIVE INCOME OR LOSS FOR THE YEAR (158-166)	166 167	0	0	0	0
V. TOTAL COMPREHENSIVE INCOME/LOSS FOR THE PERIOD (157+167)	168	55.854.346	9.798.842	57.818.324	10.123.584
APPENDIX Statement of Comprehensive Income (to be filled in by entities submitting consolidated financial statements)
VI. TOTAL COMPREHENSIVE INCOME/LOSS FOR THE PERIOD
1. Attributable to owners of the company	169
2. Attributable to non-controlling interests	170	52.002.666	6.811.015	57.703.626	8.870.567

CASH FLOW STATEMENT - Indirect method in the period 01 January 2015 to 30 September 2015

Issuer: Ericsson Nikola Tesla d.d.
Item	AOP	Previous	Current period
1	2	period
CASH FLOW FROM OPERATING ACTIVITIES		3	4
1. Profit before tax	001	55.854.346	57.818.324
2. Depreciation and amortisation	002	33.669.414	36.944.824
3. Increase in liabilities	003
4. Decrease in receivables	004	93.864.719	60.525.415
5. Decrease in inventories	005	705.546
6. Other increase in cash flow	006	12.108.117	486.934
I. Total increase in operating cash flow (001 do 006)	007	196.202.142	155.775.497
1. Decrease in liabilities	008	65.444.258	22.751.601
2. Increase in receivables	009
3. Increase in inventories	010		6.164.898
4. Other decrease in cash flow	011
II. Total decrease in operating cash flow (008 do 011)	012	65.444.258	28.916.500
A1) NET INCREASE IN OPERATING CASH FLOW
(007-012)	013	130.757.885	126.858.997
A2) NET DECREASE IN OPERATING CASH FLOW	014
(012-007)
CASH FLOW FROM INVESTMENT ACTIVITIES
1. Proceeds from sale of property, plant and equipment	015	103.753	294.874
2. Net disposal of financial assets	016	79.100.000	78.142.023
3. Interest received	017	5.426.113	2.438.179
4. Dividend received	018
5. Other cash from investing activities	019	964.141	62.201
III. Total cash flow from investing activities (015 do 019)	020	85.594.006	80.937.277
1. Purchase of property, plant and equipment and intangible assets	021	36.892.999	44.988.402
2. Purchase of financial instruments	022		62.000.000
3. Other cash flow used in investing activites	023
IV. Total cash flow from investing activities (021 do 023) B1) NET INCREASE IN CASH FLOW FROM INVESTING ACTIVITIES	024	36.892.999	106.988.402
(020-024)	025	48.701.008
B2) NET DECREASE IN CASH FLOW FROM INVESTING ACTIVITIES	026		26.051.125
(024-020) CASH FLOW FROM FINANCIAL ACTIVITIES
1. Proceeds from issuance of financial instruments	027
2. Proceeds from loans	028
3. Other cash flow from financial activities	029
V. Total cash flow from financial activities (027 do 029)	030	0	0
1. Repayment of interest-bearing borrowings	031
2. Dividend paid	032	424.922.141	119.714.758
3. Repayment of finance lease	033
4. Repurchase of treasury shares	034
5. Other cash flow used in financial activities	035	2.646.839	2.585.043
VI. Total cash flow used in financial activities (031 do 035)	036	427.568.979	122.299.801
C1) NET INCREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES
(030-036)	037
C2) NET DECREASE IN CASH FLOW FROM FINANCIAL ACTIVITIES	038	427.568.979	122.299.801
(036-030) Total increase in cash flow (013 – 014 + 025 – 026 + 037 – 038)	039
Total decrease in cash flow (014 – 013 + 026 – 025 + 038 – 037)	040	248.110.087	21.491.929
Cash and cash equivalents at the beginning of the period	041	404.269.422	182.106.153
Increase in cash and cash equivalents	042	0	0
Decrease in cash and cash equivalents	043	248.110.087	21.491.929
Cash and cash equivalents at the end of the period	044	156.159.335	160.614.224

1.1.2015 to Item	AOP	Previous
		period	Current period
1	2	3	4
1. Share capital	001	133.165.000	133.165.000
2. Capital reserves	002
3. Reserves from profit	003	25.710.740	22.942.695
4. Retained earnings	004	92.786.320	56.221.186
5. Profit or loss for the period	005	55.854.346	57.818.324
6. Revaluation of property, plant and equipment	006
7. Revaluation of intangible assets	007
8. Revaluation of financial financial assets available for sale	008
9. Other revaluations	009
10. Total capital and reserves (AOP 001 do 009)	010	307.516.406	270.147.205
11. Foreign exchange differences from investments in foreign operations	011
12. Current and deferred taxes	012
13. Cash flow hedge	013
14. Changes in accounting policies	014
15. Prior year adjustment	015
16. Other changes in equity	016
17. Total increase/decrease in equity (AOP 011 do 016)	017	0	0
17 a. Parent company share in subsidiary	018
17 b. Minority interest	019

Items that decrease equity have negative sign

Items from 001 to 009 are state of balance sheet date

Notes to the Financial Statements

1. Segment reporting

	Networks		Professional Services		Support services		Unallocated		Total
	30.9.2015.	30.9.2014.	30.9.2015.	30.9.2014.	30.9.2015.	30.9.2014.	30.9.2015.	30.9.2014.	30.9.2015.	30.9.2014.
	'000 kn	'000 kn	'000 kn	'000 kn	'000 kn	'000 kn	'000 kn	'000 kn	'000 kn	'000 kn
Segment sales revenue	418.905	479.127	487.903	390.188	29.343	26.620	0	0	936.151	895.935
Operating profit/(loss)	8.632	11.880	69.760	61.667	1.762	1.485	-22.451	-23.030	57.704	52.003

2. Transactions with related parties

	30.9.2015. '000 kn	30.9.2014. '000 kn
Total sales	622.541	436.669
Total purchases	317.613	269.184

3. Balances with related parties

	30.9.2015. '000 kn	31.12.2014. '000 kn
Receivable	106.344	102.179
Payable	55.021	71.689

4. Other notes to the financial statements are disclosed within the Management Board report.