+
CONSOLIDATED AND SEPARATE
ANNUAL REPORT 2022
DALEKOVOD GROUP
Dalekovod d.d.
E-mail: dalekovod@dalekovod.hr
Website: www.dalekovod.com
TABLE OF CONTENTS
Management Board report
1
Statement of compliance with the code of corporate governance
26
Responsibility for consolidated and separate annual statements
30
Independent Auditors’ Report to the shareholders of Dalekovod d.d.
32
Consolidated and separate income statement
40
Consolidated and separate statement of other comprehensive income
41
Consolidate and separate statement of financial position
42
Consolidated and separate statement of changes in equity
44
Consolidated and separate statement of cash flows
46
Notes to financial statements
48
THE GROUP’S OPERATING INCOME, EBITDA AND NET PROFIT
(I–XII 2022)
OPERATING INCOME, EBITDA AND NET PROFIT OF THE COMPANY
DALEKOVOD D.D.
(I–XII 2022)
OPERATING INCOME
1,050 million HRK
EBITDA
46 million HRK
GAIN FOR THE PERIOD
5.6 million HRK
OPERATING INCOME
758 million HRK
EBITDA
33.4 million HRK
GAIN FOR THE PERIOD
2 million HRK
1
MANAGEMENT BOARD REPORT
Key messages
New circumstances and challenges related to the Russia-Ukraine crisis and the ongoing negative effects of the
COVID-19 pandemic, that is, reduced tender activity in 2020 and 2021 had a negative impact on the activities of
Dalekovod Group (hereinafter: the Group). Challenges related to the Russia-Ukraine crisis have additionally
accelerated the existing increase of prices of material and raw material, and thus aggravated the inflation
pressure, all of which had a negative effect on the Group’s profitability.
The Group launched intense negotiations on key markets and with key customers in terms of regulating the
existing activities and settling the difference due to increased costs and on these grounds, significant positive
effects on business operations are expected.
However, due to new circumstances and challenges, we are already seeing a significant recovery of business
operations through newly concluded contracts, which has a positive effect on the company’s position in the
upcoming period.
At Group level, 2022 saw a 24-percent decrease in operating income compared to the same period of the
previous year, amounting to HRK 1,050 million. The major culprit for the decrease in the Group’s income was its
parent company, Dalekovod d.d. (hereinafter: the Company) because of the discontinuation of works on two
projects in Ukraine and reduced activity in Scandinavian countries.
A company of the Dalekovod Ljubljana d.o.o. group was also a factor contributing to decreased income in the
observed period, because the most significant project, Cirkovce-Pince 2x400 kV, is in its final stages. The
Ukrainian projects are not expected to yield losses or negatively affect the Company’s profitability because of
the structure of the contract with the investors with minimized risks.
The production segment achieved 32 percent higher income (HRK 191 million) compared to the same period of
the previous year.
In 2022, the company Dalekovod Mostar recorded a growth in income of 25 percent compared to the same
period of the previous year. Increased income is a result of a high level of contracted works during 2021 as well
as a faster realization of the projects contracted in 2021 and 2022.
Dalekovod Projekt d.o.o. achieved a 15-percent growth in income compared to the same period of the previous
year.
Dalekovod EMU d.o.o. achieved a 14-percent growth in income compared to the same period of the previous
year.
2
Group’s EBITDA in the reporting period is 46 million, and this was mostly a result of the above-mentioned
circumstances related to decreased tender activity of key customers due to the COVID-19 pandemic and the
challenges related to the Russia-Ukraine crisis in the context of a strong increase in the prices of material, raw
material, and energy, and consequently, all the other costs.
A recovery of the business operations was visible in Q3 2022, and the positive trend continued in Q4 2022 when
income was achieved in the amount of HRK 345 million. The income level in this quarter was also affected by
the collection of increased operating costs in agreement with national and foreign investors based on defined
methodologies.
Particularly good evidence of the recovery of business operations are the newly concluded contracts: on 31
December 2022, the Group had a Contract Book amounting to more than HRK 1.8 billion which has a positive
effect on income stability in the upcoming period.
In the upcoming period, we are expecting the strong tendering activity in the energy and transport infrastructure
to continue both through the implementation of the NRRP projects and through a strong investment activity in
terms of implementing green and digital transition activities on the markets where Dalekovod Group has been
traditionally and strongly present, including significant investments in energy infrastructure and renewable
energy sources.
After the capital increase was conducted and the total subscribed capital of HRK 410 million in cash was paid in
January 2022, on 11 February 2022, the Company used the funds collected by issuing new shares to settle its
debt toward the creditors whose claims were established in a pre-bankruptcy settlement. The total amount of
settled claims at the Company level was HRK 357 million. The debt indicators consequently improved, as did the
Company’s and Group’s overall financial position as on 31 December 2022 compared to the same period last
year. Taking into consideration all the above, i.e., the elimination of capital inadequacy and limited financial
possibilities, the capital increase will allow for Company’s and Group’s continued development and their greater
resistance to external risk factors.
During the third quarter, a final decision was made on the award of the Company’s real property in Dugo Selo.
In the fourth quarter, a write-off of the liabilities toward the creditor PODRAVSKA BANKA d.d. was carried out in
the amount of HRK 25 million. The Group’s total financial debt and indebtedness related to the claims of separate
creditors who did not participate in the pre-bankruptcy settlement thus decreased by the above amount.
As regards the Dugo Selo - Križevci project, based on the decision of the members of the consortium, and
pursuant to the provisions of the inter-consortium agreement, the Company is planning to take over the
remaining unfinished works on the Dugo Selo - Križevci project from the domain of the DIV Group, which the
investor, HŽ infrastructure consented to.
3
Financial results for 2022
*In accordance with the international financial standards, the items in the profit and loss account and in the reports on the Group’s
financial position in the previous period, i.e., in 2020 and in 2021, have been harmonized for financial impact of the mentioned
transactions, i.e., the termination of business activity.
The Group’s operating income amounts to 1,050 million HRK and has decreased by 24% compared to the same
period in the previous year. The Group’s sales income amounted to 1,030 million HRK and has decreased by 25%
compared to the same period in the previous year. The income growth is the result of the high level of contracted
projects during the previous year, that is the high level of contracting before the COVID-19 pandemic. Due to
the aforementioned circumstances related to the COVID-19 pandemic, both the Group and the Company
recorded a decline in operating profitability.
Group’s EBITDA (calculated as follows: “Operating income - Operating expenses + Depreciation”) amounts to 46
million HRK, which represents a decrease of 29.6 million HRK compared to the same period in the previous year.
Operating income of the parent company, Dalekovod d.d. (hereinafter: “the Company”), amounts to 758.3
million HRK and has decreased by 25% compared to the same period in the previous year. The Company’s EBITDA
amounts to 33.4 million HRK, which represents a decrease of 27.6 million HRK compared to the same period in
the previous year. The Company’s profit in the current year comprises the profit from the regular business
activities in the amount of 2 million HRK and the loss from the discontinued operations (related to the sales of
the galvanization segment) in the amount of 406 thousand HRK.
Indicators (in HRK 000)
Dalekovod Group
Dalekovod d.d.
2022
2021
Index
2022
2021
Index
Total revenue
1,050,269
1,383,761
76
758,275
1,009,438
75
Sales revenue
1,029,550
1,364,324
75
710,486
966,581
74
Operating expenses
(1,034,283)
(1,339,885)
77
(752,205)
(975,282)
77
EBITDA
45,968
75,606
-29,638kn
33,399
60,986
-27,587kn
EBIT
15,986
43,876
-27,890kn
6,070
34,156
-28,086kn
Net profit
6,379
16,232
-9,853kn
2,377
12,696
-10,318kn
Discontinued operations
(768)
(179)
-589kn
(406)
(1,262)
+856kn
Net profit after discontinued
operations
5,611
16,053
-10,442kn
1,971
11,434
-9,462kn
EBITDA margin
4.4%
5.5%
4.4%
6.0%
4
Business operations of the company Dalekovod Ljubljana d.o.o. and the process of operational restructuring
which resulted in a significant improvement of operating activities in the production segment, i.e. in the
companies Proizvodnja MK d.o.o. and Proizvodnja OSO d.o.o., resulted in the Group recording higher EBITDA
than the parent company. Despite the improvement of operating activities in the companies Proizvodnja MK
d.o.o. and Proizvodnja OSO d.o.o., their financial position is still marked by a very limited liquidity, and the
growth of prices of raw materials and their delivery further complicates operational business.
5
The Group’s financial position
Dalekovod Group
Dalekovod Group
Dalekovod d.d.
(in 000 HRK)
2022
2021
Index
2022
2021
Index
ASSETS
976,786
1,319,215
74
907,500
1,230,608
74
Non-current assets
286,773
328,690
87
315,502
354,677
89
Current assets
690,013
990,525
70
591,998
875,931
68
Inventories
79,067
73,175
108
8,433
8,049
105
Trade and other receivables
580,138
446,852
130
560,653
405,465
138
Receivables for subscribed
unpaid capital
-
410,000
-
-
410,000
-
Income tax receivable
2,177
2,371
92
1,535
1,554
99
Cash and cash equivalents
28,509
57,842
49
21,377
50,727
42
Assets held for sale
122
285
43
-
136
-
LIABILITIES
481,451
836,208
58
455,139
787,065
58
Provisions
25,622
29,637
86
23,787
26,085
91
Non-current liabilities
44,605
70,007
64
47,736
73,151
65
Borrowings
34,012
60,483
56
37,143
63,627
58
Trade and other payables
-
39
-
-
39
-
Deferred tax liability
10,593
9,485
112
10,593
9,485
112
Current liabilities
411,224
736,564
56
383,616
687,829
56
Borrowings
28,413
294,408
10
35,633
301,875
12
Trade and other payables
355,474
380,685
93
321,762
320,621
100
Income tax payable
26,439
29,209
91
26,221
29,030
90
Liabilities held for sale
898
551
163
-
-
-
EQUITY
495,335
483,007
103
452,361
443,543
102
Share capital
412,472
412,472
100
412,472
412,472
100
Legal reserves
166
166
100
-
-
-
Treasury shares
(8,466)
(8,466)
100
(8,466)
(8,466)
100
Statutory and other reserves
43,394
43,099
101
8,466
8,466
100
Revaluation reserves
48,255
43,208
112
48,255
43,208
112
Translation reserves
(5,011)
(4,586)
109
-
-
-
Accumulated loss
4,525
(2,886)
(157)
(8,366)
(12,137)
69
6
The significant improvement in the financial position of the Group and the Company was primarily influenced
by the implementation of the recapitalization process. As mentioned before, based on the Shareholders'
Decision on the increase of the basic 410 million HRK were paid into the company's capital, i.e., 41,000,000 new
ordinary shares with an individual nominal amount of HRK 10 were subscribed, and thus the company's share
capital was increased to the amount of HRK 412,471,930.00. On February 11, 2022, the company with the funds
collected by issuing new shares settled their debts to creditors whose claims were determined pre-bankruptcy.
settlement. The total amount of settled claims based on principal and interest at the level of the Company
amounted to HRK 357 million, and as a result, debt and overall financial indicators have significantly improved
the position of the Company and the Group.
In addition to the previously mentioned, the most significant changes in the financial position refer to changes
in working capital, the Group's short-term assets decreased by 30 percent, and short-term liabilities by 44
percent how much. The biggest impact on the reduction of short-term assets is the previously mentioned use of
funds from recapitalization and payment of claims determined by the pre-bankruptcy settlement in accordance
with the decisions of the Main Office assembly held on June 30, 2021. The transaction in question had a
significant impact on reduction of short-term liabilities.
* Financial debt adjusted for debt that does not affect the company's operating cash flows: (i) Mezzanine debt (ii) Separate debt.
Type of financial debt
Dalekovod Group
Dalekovod d.d.
2022
2021
Index
2022
2021
Index
Senior debt
-
213,434
-
-
213,434
-
Lease liabilities
31,492
69,152
46
30,523
67,727
45
Bonds
13,019
14,367
91
17,185
18,962
69
Mezzanine
-
31,711
-
-
36,303
-
Prebankruptcy liabilities
-
67,492
-
-
67,492
-
Other
17,914
11,366
158
25,068
18,807
155
Total financial debt
62,425
407,522
15
72,776
422,725
17
Adjusted financial debt
62,425
308,319
20
72,776
318,930
23
7
The overview of the Group’s key segment business activities
The Energy Sector (construction of transmission lines and electrical substations) during 2022, recorded a drop
in income of 30.5 % in 2022 compared to the same period of the previous year, and the total income amounted
to HRK 642 million. The profitability of both sectors significantly decreased due to the lower level of contracting
and the negative effect of the increase of the prices of material and raw material and other related costs.
Reduced activity on the Scandinavian market and the discontinuation of works on two projects in Ukraine had a
negative effect on the income in the Energy Sector. The transmission lines segment is currently working on 20
large projects (1 in Norway, 6 in Sweden, 5 in the region, 2 in Germany and 6 in Croatia) as well as 8 smaller
projects, and the substation segment is working on 12 large projects (5 in Croatia, 3 in Norway and 4 in
Macedonia).
In 2022, in The Sales Sector (transmission lines and substations segment), works have been contracted in the
total value of HRK 488 million.
The Infrastructure Sector recorded a 41.37 % increase in income compared to the same period of the previous
year, and total income in 2022 amounted to HRK 93.3 million. The largest part of the income resulted from the
railway construction projects of Križevci–Botovo, Dugo Selo-Križevci, Zaprešić-Savski Marof and Vinkovci-
Vukovar. The sector’s profitability is according to plan. The most significant investors of the concerned sector
are HŽ Infrastruktura and Hrvatske ceste. There are 10 ongoing projects, and works are taking place on 9 sites.
In Q4 2022, a contract was concluded for an OCL construction project on the Karlovac-Leskovac railway track, in
the value of HRK 155 million. Another valuable project, the Omiš bypass (client: Hrvatske ceste) worth HRK 60
million is in the selection stage of the public tender. Award is expected in early 2023.
The production segment takes place through two companies - Proizvodnja MK d.o.o. and Proizvodnja OSO d.o.o.
During 2022, the company Proizvodnja MK d.o.o. produced/processed 3,942 tones, which is an increase of app.
25 % compared to the same period of the previous year. The increase in production is mostly a result of the
Slovakia project, the project for the Italian Ansaldo, the project for the Swedish Ellevio, and continuously good
cooperation with GE Power Norway on the Sogn and Hamang projects.
On the domestic market, the long-expected Bilice-Trogir project and the High Voltage Testing Laboratory (buyer:
Končar Institute) projects were executed. The income of Proizvodnja MK d.o.o. in 2022 was 50 percent higher
than in the same period of the previous year and amounted to HRK 103.2 million as a result of increased exit
prices and the level of realized works.
8
During 2022, Proizvodnja OSO d.o.o. produced/processed 1,416 tonnes, which is a 7.5 % decrease compared to
the same period of the previous year. This decrease in terms of quantity is a consequence of reduced activity of
key customers, including the parent company due to the above-mentioned circumstances. Regardless of the
recorded decrease in terms of quantities of material produced/processed, the operating income of the company
Proizvodnja OSO d.o.o. was 15 percent higher in 2022 compared to the same period of the previous year and
amounted to HRK 87.6 million, which is a result of higher exit prices and the structure of realized works.
The achieved EBITDA of the production segment, that is, of both companies, is HRK 9.2 million, i.e., HRK 1.2
million more than in the same period of the previous year.
The operating income of the Design Segment, which is linked to the activities of Dalekovod Projekt d.o.o., was
HRK 40.6 million, which is 15 percent more than in the same period of the previous year (2021 – HRK 35,2
million). The growth in income is a result of the strong breakthrough into the foreign market, especially the
Swedish one. This indicates an almost six-fold increase in income on the foreign market in relation to the same
period of the previous year (HRK 17.5 million). Considering the cyclic nature of designing activities, a satisfactory
level of profitability was preserved. The steady level of contracted works ensures their execution in the upcoming
period.
Dalekovod Ljubljana d.o.o. in 2022 achieved an income of HRK 116 million, 101.5 million of which is related to
the Cirkovce-Pince 2x400 kV project. The decreased level of operating income is related to the decreased extent
of works on the concerned project, that is, the fact that it is in its final stages. The company’s EBITDA achieved
in 2022 was HRK 2.5 million.
Dalekovod Emu d.o.o., operating on locations in Zagreb and Vela Luka, achieved an operating income in 2022
in the amount of HRK 3.58 million, which is a 15 percent increase compared to the previous year. In its business
operations, the Company performs works from the segment of measuring and testing electromagnetic fields of
high and low frequencies and the works of electricity meter calibration. Although the companies with HF and LF
radiation sources are legally obligated to perform EMF measurements, it is difficult for the operators to carry
out the measurements because of the access to radiation sources, i.e., because they have to enter private and
business premises to carry out the measurement. The other business segment, the calibration of meters at the
Company’s own calibration station in Vela Luka is still at the level of HEP’s annual needs for installing meters
into new buildings, whereas an overall replacement of the old meters with new smart meters is expected in the
upcoming period.
9
Dalekovod Mostar d.o.o. recorded HRK 69.9 million income in 2022, which is an increase of app. 25 percent
compared to the same period of the previous year. As a consequence of the growth in income with
approximately equal fixed costs as the previous year, the company’s EBITDA for 2022 amounts to HRK 3.6 million
and is 39 percent higher than the previous year. Increased income is a result of a high level of contracted works
during 2021 as well as a faster realization of the projects contracted in 2021 and 2022. The execution of these
projects slowed down during the previous two years as a consequence of the COVID-19 pandemic. In 2022, it
intensified and expanded, among other, as a result of our Investors’ investments into renewable energy sources.
*On 1 March 2020, in the company Proizvodnja MK i OSO d.o.o. there was a separation of the economic unit related to the production
of suspension and coupling equipment. That economic unit continues to operate as a separate business entity Proizvodnja OSO d.o.o.
(PIN: 55411035652), and the company Proizvodnja MK i OSO d.o.o. changed its name to Proizvodnja MK d.o.o.
**Termination of business activity
Company name
Business revenue
Adjusted EBITDA
(in 000 HRK)
2022
2021
Index
2022
2021
Index
Dalekovod d.d.
758,275
1,009,438
75
33,399
60,986
-27,587kn
Proizvodnja MK d.o.o.*
103,175
68,770
150
4,503
3,211
+1,292kn
Proizvodnja OSO d.o.o.*
87,634
76,212
115
4,671
4,809
-138kn
Dalekovod Projekt d.o.o.
40,579
35,221
115
2,716
1,362
+1,354kn
Cinčaonica Usluge d.o.o.**
190
20
950
(770)
(169)
-601kn
Dalekovod EMU d.o.o.
3,670
3,217
114
449
408
+41kn
Other affiliates
185,665
418,055
44
6,309
8,097
-1,788kn
Elimination
(128,919)
(227,172)
57
(5,309)
(3,098)
-2,211kn
Total Group
1,050,269
1,383,761
76
45,968
75,606
-29,638kn
10
Strategy – business guidelines for future periods
With the implementation of the recapitalization and the successful completion of the pre-bankruptcy
settlement, Dalekovod Group enters a new development phase in which it can use all its past experience,
acquired knowledge and proven successful implementation of complex projects in significantly difficult
circumstances combined with the implemented restructuring of business processes and synergistic effects
within the Končar Group.
The industry in which Dalekovod Group competes expects a significant conjuncture in the future period for
several key reasons: (i) the relatively old transmission of networks requiring renewal; (ii) the shift towards
renewables and the general trend of the transition from energy generated from traditional fossil sources to
electricity generated from renewable sources; (iii) conducting tenders postponed in previous periods due to the
COVID-19 pandemic; (iv) also awaits the resolution of the Ukrainian crisis, which would calm the situation in the
materials market and make assumptions for significant new business in the reconstruction of Ukraine's
infrastructure.
The financial and operational restructuring carried out will enable Dalekovod Group to continue operating in the
traditional markets of Scandinavia, the Region, Central and Eastern Europe and the domestic market with the
possibility of increasing the profitability of the business. It will also support the continued entry into new markets
such as Germany, where the first projects have been successfully completed, opening up the possibility of further
strengthening the position in this potent market (30% of all investments in Europe are still expected to be in this
market, according to ENTSO) and in markets that will contribute to the increase in operating margin.
The new level of capitalization and working capital will enable the Group to participate in tenders that we have
not participated in before and to modernize machines and tools, which will also significantly affect the increase
in revenues and business efficiency.
Dalekovod Group will continue to invest significantly in the health and safety of its employees and increase
investments in sustainable development with the aim of striking a balance between the environment, society
and our activities in order to meet the requirements of development, without compromising the prospects of
future generations.
The organization of the Dalekovod Group, which enables control over all important parts of the process with
synergy within the Končar Group, will enable further focus on increasing the profitability of the business in all
segments of the business and focus on the realization of new business opportunities.
11
Management and supervisory board
As at 31 December, the Dalekovod Group (“Group”) comprises parent company Dalekovod d.d. and fourteen
subsidiaries owned by parent company and one company managed as joint venture (2020: fourteen subsidiaries
owned by parent company and one company managed as joint venture) – please see note 22 and 24.
Dalekovod d.d. Zagreb (hereinafter referred to as the Company) was founded in accordance with laws and
regulations of Republic of Croatia. Company's registered office is in Zagreb at Marijana Čavića 4. Company's
shares are listed on ZSE (Zagreb Stock Exchange).
The main activity of the Company is design, production, construction and erection of power facilities, road, rail
and city traffic facilities and telecommunication infrastructure.
Board
The Management Board manages the affairs of the Company in accordance with the positive regulations,
Company Articles of Association and the Rules of Procedure of the Management Board.
The Management Board of the Company as at 31 December 2022 consists of Mr. Tomislav Rosandić (President
of the Management Board), Mr. Eugen Paić-Karega (Member of the Management Board), Mr. Ivan Kurobasa
(Member of the Management Board) and Mr. Tvrtko Zlopaša (Member of the Management Board).
Supervisory Board
The Supervisory Board of the Company as at 31 December 2022 consists of: Mr. Gordan Kolak (Chairman of the
Supervisory Board), Mr. Josip Jurčević (Deputy Chairman of the Supervisory Board), Mr. Josip Lasić (Member of
the Supervisory Board), Mr. Dražen Buljić (Member of the Supervisory Board), Mr. Božidar Poldrugač (Member
of the Supervisory Board), Mr. Damir Spudić (Member of the Supervisory Board) and Mr. Pavao Vujnovac
(Member of the Supervisory Board).
According to the authorities provided by the Companies Act, Articles of Association and Standing Orders of
operations of Dalekovod dd. Supervisory Board, the Supervisory Board overlooks company’s business
operations. Sessions of the Supervisory Board are held at least four times annually (more frequently if required);
members of Supervisory Board often discuss strategy and operational plan of Company at such sessions.
Supervisory Board acts solely for management and supervision and sub-committees (commissions) are
appointed with specific responsibilities.
Dalekovod d.d. is represented to Supervisory Board by representatives appointed by the Company. In
compliance with the Labour Act, employees also have their representative in the Supervisory Board. General
shareholders influence on management processes is specified by the Companies’ Act.
12
The fees payable to the members of the Supervisory Board are fixed and are not subject to their presence at
meetings. The qualification and expertise of the members of the Supervisory Board for strategic management
of the organization in terms of economic, environmental and social issues are not evaluated separately.
However, the members of the Supervisory Board are expected to have expertise and abilities to recognize risks
and circumstances arising from the operations of Dalekovod d.d. and from its surrounding (which also includes
the issues relating to social responsibility in business operations). It is necessary to constantly improve the
Supervisory Board’s procedures for supervising the management of economic, environmental and social effects,
including some significant risks and circumstances, as well as adherence to or compliance with internationally
agreed standards, codes of conduct and principles.
The Supervisory Board has its sub-committees that help Supervisory Board within the scope of their competence,
thereby contributing to giving proposals for decisions accompanied with reasons for and against acceptance
thereof. The Supervisory Board may form following sub-committees:
• Sub-committee for corporate management
• Sub-committee for audit
• Sub-committee for appointment and rewarding
Own shares
In 2022, the Company has not acquired any of its own shares.
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries are detailed in Note 22 to Financial Statements.
Investments in associates are detailed in Note 23 to Financial Statements.
Investments in joint ventures are detailed in Note 24 to Financial Statements.
Subsequent events
Among the more significant events after the balance sheet date, we would highlight the opening of a branch in
Slovenia in March 2023.
On 31.03.2023. Mr. Ivan Kurobasa ceases to be a member of the Management Board.
Due to the current situation in Ukraine, force majeure has been declared on both projects that we had as active
during 2022. With the proclamation of force majeure, all actions on the project were suspended. Dalekovod d.d.
does not expect losses on these projects due to the very structure of the Investor Agreement where risks are
minimized.
13
The following is a presentation of the Balance Sheet and Profit and Loss Account as at 31 December 2021 and as
at 31 December 2022:
From the above it can be seen that the company has receivables and liabilities in significant amounts, however
due to the mutual connection or interdependence of one another, we consider that it is not needed to adjust
the value with the stated claims.
Payment according to crucial suppliers (subcontractors) for both projects is related to the "BACK TO BACK"
conditions, i.e. payment only after payment. According to the mentioned projects, all bank guarantees have
been withdrawn, which will be reissued after the continuation of the projects and the revision of the Agreement.
Until the reporting date, there are no major changes compared to December 31, 2022.
The Government of the Republic of Croatia adopted the Decision on the announcement of the introduction of
the euro as the official currency in the Republic of Croatia (published in "Official Gazette" No. 85/22). With the
aforementioned decision, the euro becomes the official monetary unit and legal currency in the Republic of
Croatia on 1 January 2023. The fixed conversion rate is set at HRK 7.53450 for one euro. The introduction of the
euro as the official currency in the Republic of Croatia represents a change in the functional currency that will
be calculated prospectively and does not represent an adjusting subsequent event.
Ukraine branch
31.12.2022
31.12.2021
Property, plant and equipment
2
4
Inventories
24
460
Trade and other receivables
80,029
68,477
Cash and cash equivalents
118
2,507
Total assets
80,173
71,448
Accumulated loss
(2,204)
1,615
Profit/Loss for the financial year
1,979
(3,818)
Total equity
(225)
(2,204)
Trade and other payables
80,398
73,652
Total equity and liabilities
80,173
71,448
14
Targets and policies in connection with financial risk and capital risk management
The Company and the Group are exposed to market risk, price risk, credit risk and liquidity risk, which are,
together with capital risk management, detailed in Note 4 to Financial Statements.
Shareholder structure (as at 31 December 2022)
According to the Articles of Association, shareholders’ voting right is not limited to a certain percentage of the
number of votes and there are no time limits for exercising the voting right. Each ordinary share entitles to one
vote at the General Meeting.
The Company’s rights and obligations arising from acquiring its own shares are exercised and performed in
accordance with the Companies Act and the Articles of Association.
SUBJECT
NUMBER OF SHARES
Napredna energetska rješenja d.o.o.
31,000,000
Financial Institutions
7,004,080
Foreign company
2,401,233
Individuals
200,729
Own shares
988
Others
640,163
TOTAL
41,247,193
15
Affiliates and subsidiaries
REPUBLIC OF CROATIA
1. PROIZVODNJA MK d.o.o., Vukomerička 9, 10410 Velika Gorica 79970472123/ 080437239
2. PROIZVODNJA OSO d.o.o., Vukomerička 9, 10410 Velika Gorica 55411035652/ 081296773
3. DALEKOVOD EMU d.o.o., 43. ulica br. 36., Vela Luka 52516402606/ 090027780
4. DALEKOVOD-PROJEKT d.o.o., Marijana Čavića 4, Zagreb 30467839701/ 080445749
5. DALEKOVOD ADRIA d.o.o., Marijana Čavića 4, Zagreb 37315161677/ 080703108
6. EL-RA d.o.o., Vela Luka (Općina Vela Luka) 30113948970/ 060033055
7. CINČAONICA USLUGE d.o.o. – in liquidation 90304389514/ 081231295
On March 1, 2020, there is a separation of economic unit related to the production of suspension and coupling equipment
in company Proizvodnja MK i OSO d.o.o.. The stated economic unit continues its business as a separate business entity
Proizvodnja OSO d.o.o., and the company Proizvodnja MK and OSO d.o.o. changes its name to Proizvodnja MK d.o.o.
ABROAD
8. DALEKOVOD Plt, Namibia
9. DALEKOVOD TKS a.d., Doboj, BiH (in liquidation)
10. DALEKOVOD MOSTAR d.o.o., BiH, Ante Starčevića bb, Mostar, BIHJIB: 4227105910001
11. DALEKOVOD LJUBLJANA d.o.o., Zavetiška ul. 1, 10000 Ljubljana, SLO, Porezni broj: SI 28940024
12. DALEKOVOD UKRAJINA d.o.o., Ukraine, 4 Lunacharskogo str. 02002 Kiev, Ukraine, MBS: 36683014
13. DALEKOVOD LIBYA for engineering, joint company, Libya
14. DALEKOVOD NORGE AS, Norway, Sandviksveien 26, 1363 Høvik, Norway, MBS: 998628253
BRANCH OFFICES
15. DALEKOVOD NUF, Norway, Sandviksveien 26, 1363 Høvik, Norway
16. DALEKOVOD Skopje, 50te Divizije br. 36, Skopje-Centar, Skopje, North Macedonia
17. DALEKOVOD CRNA GORA, Ul. IV Proleterske br. 34, Podgorica, Montenegro
18. DALEKOVOD UKRAJINA - branch in Ukraine, 4 Lunacharskogo str. 02002 Kiev, Ukraine
19. DALEKOVOD – Branch Of Kosovo, Kosovo, St. Garibaldi 3/7, 10000 Prishtine, Kosovo
20. DALEKOVOD D.D. – branch in Sweden c/o Amesto Accounthouse AB, Roselundsgatan 54, 118 63
Stockholm, Sweden
21. DALEKOVOD DD Zagreb – podružnica Mostar, Ante Starčevića bb, 88000 Mostar
22. DALEKOVOD NJEMAČKA, Njemačka, Steistr. 28, 40210 Dusseldorf
16
Description of products and services
Over time, Dalekovod d.d. has become specialized in performing contracts on a “turn-key” basis in the following
areas:
• electrical facilities, especially transmission lines between 0.4 and 750 kV
• transformer stations of all levels and voltages up to 500 kV
• air, underground and underwater cables up to 110 kV
• telecommunication facilities, all types of networks and antennas
• production of suspension and joining equipment for transmission lines and TS stations from 0.4 to 750 kV
• production and installation of all metal parts for roads, especially for road lighting, security barriers and traffic
signals, tunnel lighting and traffic management
• electrification of railway tracks and tramways
17
SOCIAL RESPONSIBILITY REPORT
One of the main focuses of the Dalekovod company is socially responsible business, which includes taking care
of employees, the environment, respecting human rights and fighting corruption.
The Social Responsibility Report that Dalekovod d.d. prepares at the annual level has been prepared for the 1
January – 31 December 2022 reporting period.
The Social Responsibility Report will be available in June 2023. An integral part of the Report will in accordance
with the acts of the European Union, Article 11, Paragraph 3 (EU Taxonomy).
It was prepared by the Dalekovod Group and covers four companies within the Group, in which the parent
company has the dominant influence. The last report was published in 2022 (for the 2021 calendar year) and is
available on the website https://www.dalekovod.hr/un-global-compact.aspx and as part of the annual audited
financial report on the website https://www.dalekovod.hr/izvjesca-2021.aspx.
The person responsible for questions related to the report and its content is the Head of Corporate
Communications. The Dalekovod Group selected the option of core compliance with G4 guidelines. The report
has not been externally verified. Until the next report, the Dalekovod Group will continually improve current
practices and to monitor the progress of all companies within the Group, as well as relations with stakeholders,
and to notify the public of this in the subsequent report and to consider the option of external verification.
Organization profile
The Social Responsibility Report was prepared by the Dalekovod Group, although such a form of the Group has
not been legally registered. Nevertheless, given that Dalekovod d.d. is a signatory of the UN Global Compact, we
believe that, concerning financial and environmental indicators, the companies Proizvodnja MK d.o.o.,
Proizvodnja OSO d.o.o. and Dalekovod Projekt d.o.o. must not be ignored, because, together, they form a whole,
and this in the design, production and construction of transmission lines, and with their financial reports and
environmental indicators have a significant impact on the sustainable operations of the Dalekovod Group.
Dalekovod Group is continuously working on improving current practices and monitors the work of its
companies.
18
Supply chain
Nearly all our vendors in the past year are located in Europe, which is understandable given that all our projects
last year were carried out in Europe. During cooperation with vendors, particular care is taken to respect the
following standards:
• ISO 9001 – continual improvement of quality of products and process management
• ISO 14001 – environmental management
• ISO 45001 – health and safety management system
• ISO 50001 – energy management system
Based on these standards, operating procedures for all business processes, as well as for the procurement
process, are defined in the Dalekovod Group. As part of the implementation of these work procedures, vendor
list is compiled. The method of forming the Vendor List is defined according to internal procedures; however, it
essentially consists of verifying new vendors by means of questionnaires and visits to major new suppliers by
our quality control department.
Permanent vendors on the Vendor List are evaluated at the end of each year in such a manner as to measure
quality and delivery deadlines.
As Dalekovod Group is essentially a design, production and engineering company, the structure of vendors can
vary significantly from one year to the next depending on the projects themselves, and the purchase process
begins at the stage of offering projects, when potential suppliers and the conditions with which to enter the
bidding process are defined, and often investors within the tender documents predefine a few vendors whose
equipment must be used in the actual implementation of the project. The result of a job obtained through the
tendering process is the signing of a contract with the best equipment vendors for each individual project.
Annual contracts with vendors are signed for numerous areas for anticipated purchases that are repeated
regardless of the projects themselves. Other annual contracts are related to services and certain materials whose
procurement is carried out independently of the projects themselves.
Membership in associations
With the objective of achieving wider social objectives, Dalekovod is a member of:
• Global Compact
• Croatian Chamber of Economy’s Corporate Social Responsibility Board
• American Chamber of Commerce in Croatia
• Nordic Chamber of Commerce in Croatia
19
Dalekovod, as a group, an individual company or its employees, is a member of the following organizations at
home and abroad:
• Croatian Exporters
• Croatian Chamber of Economy
• CIGRE (International Council on Large Electric Systems)
• HO CIRED (Croatian National Committee)
• MIPRO (Croatian Society for Information and Communication Technology, Electronics and Microelectronics)
• IEEE (Institute of Electrical and Electronics Engineers)
• PMI (Project Management Institute)
• Croatian Standards Institute
• Croatian Welding Society
• Croatian Society for Quality, Croatian Public Relations Association (HUOJ)
• Croatian Employers’ Association
• Croatian Chamber of Architects and Civil Engineers
• Association of Production of Metals and Metal Products
• Association of Production of Electric and Optic Equipment
• Association of Power Supply – Community of Renewable Energy Sources
• HED (Member of World Energy Council)
Owing to such memberships, experts working for Dalekovod d.d. participate in professional meetings at home
and abroad, contributing with their papers every year, where they present the work, solutions and products of
Dalekovod d.d. By sponsoring and actively participating in the preparation and organization of meetings that are
held in Croatia, Dalekovod d.d. directly helps the activities of professional organizations, considering them
important places for the promotion of their knowledge and for the exchange of experience with other experts.
Research & development activities
Focus on investors and partners and ongoing innovation are the Group values governing its market research and
new product development activities. We regularly undertake market research activities to better understand
the market needs and provide services and products to meet any challenges. At the same time, we monitor
trends and developments on highly developed markets with a focus on Scandinavia and potential expansion
beyond Europe.
20
Within these activities numerous co-operations are being settled with various small and medium enterprises
(SMEs) as well as local Universities and Institutes but also start-up community bringing new, innovative and
advance technology into existing products and services of Dalekovod as a group.
Stakeholders
Internal and external stakeholders were involved in the preparation of sections of the report. Internal
stakeholders are employees, other workers engaged in projects and in the production process through agencies
and subcontractors and their unions. External stakeholders are customers, local communities, shareholders and
investors and vendors. Group companies often act within a consortium organized for an individual project,
which additionally may result in a reduction in the establishment of direct contact of a Group company with
customers and/or communities. Therefore, besides customers, employees (including labor unions with which
they are associated), suppliers and the public sector (acting in the double role as a party ordering a product and
as business conditions regulator) may be recognized as key participants. Key participants are identified through
an analysis of business processes and circumstances and risks brought about by relationships with individual
participants. Communication is conducted on a continual basis with key participants through meetings, and
while conducting business, where their legitimate interests are taken into consideration.
Within corporate social responsibility activities, communication with a wide range of representatives of civil
society and individuals is maintained. To achieve full implementation of the organization and implementation of
corporate social responsibility activities communication with the above stakeholders took place in several
manners: communication in business relationships and regular meetings, special thematic discussions and
meetings, trade shows and professional conferences.
Dalekovod’s key stakeholders are customers, suppliers, employees and shareholders. Communication is
conducted with all of them depending on key issues and interests. In addition to the usual reporting system, for
all relevant business activities (mail newsletter, website, announcements on the Stock Exchange and in the
media), communication is conducted in other ways as deemed necessary. The main topics over the course of
the previous period were related to the restructuring of the Company, the impact of COVID-19 pandemic on
business, key investment projects and business results, with shareholders, significant contracts at home and
abroad. Communication with employees is conducted by e-mail: svi@dalekovod.hr ; svi_projekt@dalekovod.hr;
svi_mk@dalekovod.hr and svi_oso@dalekovod.hr, and by means of different notices and decisions by the
Company. Websites are recognized as an important method of communicating with partners at home and
abroad, but also the public in general. We have the following websites: www.dalekovod.com, www.dalekovod-
proizvodnja.com, www.dalekovod-projekt.com.
This is the reason why great importance is to be paid to this kind of communication with the intention of making
information on the website timely, accurate and suitable to the media used. In compliance with market
21
requirements and needs, the websites of Dalekovod d.d. and all the above-listed companies within the
Dalekovod Group are translated into English. Our main page www.dalekovod.com has additional available
versions in Norwegian and Swedish.
There is a special, internal web, intended for employees, containing several directories with documents enabling
information sharing. Key topics that arise from communication with participants include the future development
of the Company and safety of employment, professional development of employees and satisfaction of growing
market, environmental and regulatory standards required for acting on (especially international) markets.
Business ethics
On 4 July 2005, Dalekovod signed a Statement on Acceptance of the Code of Business Ethics, which was
confirmed in May 2005 by the Assembly of the Croatian Chamber of Economy. The provisions of the Business
Code must be constantly conveyed to employees of the Dalekovod Group and partners. Dalekovod’s business
policy is founded on the following business principles:
• Satisfaction of customers, vendors and other stakeholders
• Environmental protection, protection of health and safety
• Constant improvement of products and processes, as well as
• Involvement and motivation of all employees.
The principles are founded on the positive regulations of the Republic of Croatia and adopted international
standards. Dalekovod accepts and conducts international and local principles, charters and standards that
contribute to improved products, work processes and production, as well as for protecting and advancing the
natural and social environment.
Environmental management
The Dalekovod Group is committed to sustainable development by achieving a balance between the
environment, society and our activities, in order to meet the requirements for development, without
compromising perspective of future generations. Sustainable development, transparency and conformity are
basic components of the economic growth of Dalekovod.
22
Environmental management promotion
• Dalekovod Group believes that the environmental management and promotion of its activities in accordance
with economic activities are among the basic responsibilities of the top management.
• Dalekovod Group performs monitoring, measurement and analysis of the achieved results to determine goals
in relation to reducing environmental impact and preventing pollution .
• Group is continuously trying to improve environmental management by performing internal audits.
• Dalekovod Group meets all legal regulations, requirements of investors and its own guidelines relating to
environment.
• Dalekovod Group seeks to be open in communication with the local community and interested parties, and
transparently report on its environmental impacts.
• Dalekovod Group seeks to raise awareness of environmental protection through continuous training of its
employees.
• Dalekovod Group operates on a global scale and promotes environmental protection activities in all the
Dalekovod Group’s activities accordingly.
Employment, dignity of work and human rights
The social sustainability dimension concerns the impact of the organization on social systems within which it
acts. In this report, it is divided into segments of employment, dignity of work and human rights, society and
responsibility for the product. An important strategy guideline of Dalekovod d.d. is directing the development
of the Dalekovod Group towards creating a company of knowledge based on the quality of human resources
and total intellectual capital.
Because of increased demand for competitiveness, professional development of employees and efficient
management of human resources are considered the most important priorities of the organization. When
determining labor relations and internal organization, the Dalekovod Group companies comply with applicable
regulations, collective and individual agreements and protect human and civil rights, the dignity and reputation
of every employee. Neither discrimination nor harassment of employees due to their sex, race, religious, national
or political orientation, physical defects, age, family status, personal characteristics or convictions is allowed.
The equal salaries for equal work principle are applied in the entire organization. Dalekovod d.d. ensures safe
working conditions, which implies minimum differences in health and safety, providing suitable training and
insurance from consequences of such risks, where applicable.
The freedom of association and collective negotiation is not limited, and rights specified by the Collective
Agreement go beyond legal rights and are above average in the industrial sector. In the event of violation of
legal or contractual rights, an employee or an associate is entitled to seek resolution of the problem caused and
23
the protection of his/her own rights. Persons with permanent or temporary specific requirements shall, at the
time of employment or while performing their work obligations, be treated equally, however, their specific
requirements shall be taken into consideration. The Human Resources Department oversees the area of
employment. A common policy compliant with the policy of Dalekovod d.d. is implemented (parent company).
Employment and structure of employees
Permanently employed persons work abroad in representative offices and subsidiaries, depending on
requirements. The local labor force at construction sites is subject to the requirements of carrying out larger
projects in distant areas and is employed on a temporary basis. In Scandinavian countries, where Dalekovod has
the largest presence, local management with the knowledge of the local language is employed with aim to
further develop this market.
Trends in the labor force area indicate that the inflow is mainly related to recent employment of younger and
highly educated staff, but also with specialist knowledge (electro-mechanics, locksmiths, carpenters) because of
working requirements at construction sites, while the outflow is mainly related to retirement of employees.
In Dalekovod d.d., employees work for an indefinite period, full-time, while employees hired for a definite period
possess, during the period of their employment agreement, the same rights as those employees working full-
time, in compliance with applicable regulations.
Collective agreements and employees rights
The first collective agreement was concluded on 14 June 1996 with the Croatian Metalworkers’ Labor Union –
Velika Gorica Subsidiary, Croatian Construction Labor Union – Dalekovod subsidiary, Croatian Labor Union
Association, Dalekovod Labor Subsidiary, and it is applied to all employees. The Collective Agreement has been
revised several times. The recent changes and amendments were adopted in June of 2022. Announcements that
refer to important changes in business operations are given in compliance with the Labor Act and are not
specifically mentioned in the Collective Agreement. Announcements about significant changes in business
operations are given to the Workers’ Council, that is, if it has not been organized in a company, to the principal
labor union commissioner.
Health and occupational safety
During 2022, the worldwide pandemic of the disease COVID-19 continued, which affected the operations of the
Company Dalekovod d.d. Dalekovod, as a socially responsible company, takes care of all aspects of business and
wants to communicate as transparently as possible with all its stakeholders - employees, partners and investors,
customers and suppliers, the community and others. The Company has crisis headquarters to manage the
situation of the development of the epidemic of COVID-19 disease, caused by the SARS-COV-2 virus, and actions
24
in activities that are challenging for the company's operations. The Headquarters, which is responsible for the
entire Dalekovod Group, regularly reports on possible changes related to business continuity, internal and
external communication channels managed by the Corporate Communications Office.
At the beginning of the crisis, Management Board of Dalekovod d.d. decided to take measures to prevent the
spread of the COVID-19 virus epidemic to ensure health of employees and business continuity, on the basis of
which new executive decisions are made daily, in accordance with the situation and thus manage the crisis.
In order to ensure business continuity, and in accordance with the importance and responsibility of the company
to ensure the functionality of critical national infrastructure in the Republic of Croatia and the countries where
Dalekovod operates, Dalekovod continues all its business activities on active projects to the extent permitted by
current circumstances, while simultaneously planning activities in case of escalation of the crisis.
Training and education
Dalekovod Group companies are constantly working on the professional and personal development of
employees, from the moment they are hired to the present. Trainees, who are employed for the first time after
completing their education, are introduced into the jobs and assignments for their posts by the companies that
hire them. Trainees are introduced to the organization, the entire production program, references, marketing
and promotional activities, corporate social responsibility and other activities in Dalekovod Group. As part of
their training, they visit factories at the Dugo Selo and Velika Gorica locations, and are introduced to their
production processes. This important task that is conducted by Human Resources Department. Quality,
frequency and right timing for the training and development have a significant impact on the sustainability and
competitiveness of the companies. The education program attempts to adapt to the requirements of the
companies, and it is becoming increasingly complex, and includes in itself the required qualifications for the
current job (for instance, training for bridge crane operator, training for chainsaw and rotating tools operator
etc.), the possibility of expanding knowledge of tasks that employees conduct – supplementary training and the
possibility for advancement of motivated and capable individuals.
Education program adapted to employee requirements is divided into several forms of education: acquisition of
IT knowledge, foreign languages, certification exams, various training (professional seminars, program for
managers, undergraduate and graduate study program, doctorate program).
Human Resources Department encourage learning and improving of foreign languages, which is organized in
accordance with the requirements of their jobs, languages are also learned depending on company needs in
specific markets such as Norwegian or other Scandinavian languages.
25
Pursuant to Occupational Safety Act, a certain number of workers are qualified to administer first aid. For every
50 workers, one worker is trained in first aid. Therefore, due to the well-organized security and occupational
safety system, as evidenced by the low rate of injuries and cases of professional incompetence, there was no
need to further extend risk counselling, prevention and control. Regarding communication with employees,
regular meetings of teams, departments and direct supervisors are held. Communication with employees is
conducted via the e-mails svi.dd@dalekovod.hr, the spokesperson, and by means of various Company decisions
and announcements.
Diversity and equal possibilities
The ratio between basic salary for men and women according to the employee category: Basic salary for men
and women is identical in all employee categories.
Human rights
No cases of discrimination based on gender, race, age, national orientation, political and religious convictions
and other applicable criteria have been recorded. The principles of equality and uniformed criteria are compiled
for purposes of managing human resources and making other relevant business decisions.
Freedom of association and collective negotiation
Within all companies of the Dalekovod Group and in all other business activities, there is the freedom of
association and collective negotiation. No cases of their restriction have been recorded. This applies to business
activities outside of Croatia as well.
Child labor, compulsory and forced labor
Dalekovod d.d. conducts its operations in compliance with applicable legal regulations that prohibit child labor.
Dalekovod d.d. thereby operates in accordance with the Constitution and applicable legal regulations prohibiting
forced and compulsory work.
Donations and sponsorships
In accordance with its development strategy as a socially responsible company, Dalekovod has for years been
active in sponsoring science and education, culture and the arts, sports and sustainable development and health.
There is a significant impact on humanitarian activities as well. The aim is to create a society based on knowledge
and to create opportunities for young people.
26
Signed on behalf of the Management Board on 19 April 2023.
27
STATEMENT OF COMPLIANCE WITH THE CODE OF
CORPORATE GOVERNANCE
MANAGEMENT BOARD – AS AT 31 DECEMBER 2022
Tomislav Rosandić – President of the Management Board
Hrvoje Išek – Management Board Member
Ivan Kurobasa – Management Board Member
Đuro Tatalović – Management Board Member
SUPERVISORY BOARD – AS AT 31 DECEMBER 2022
Gordan Kolak – President of the Supervisory Board
Josip Jurčević – Vice President of the Supervisory Board
Josip Lasić – Supervisory Board Member
Božidar Poldrugač – Supervisory Board Member
Damir Spudić – Supervisory Board Member
Pavao Vujnovac – Supervisory Board Member
Dražen Buljić – Supervisory Board Member
AUDITING COMITTEE
Josip Lasić
Damir Spudić
Josip Jurčević
28
Dalekovod Joint Stock Company for engineering, production and construction
Marijana Čavića 4, 10 000 Zagreb, Hrvatska
10001 Zagreb, P.P. 128
URL: www.dalekovod.hr, www.dalekovod.com
E-mail: dalekovod@dalekovod.hr
Share capital: HRK 412,471,930.00 kn / 54,744,432.94 eur; Number of shares: 41,247,193.
IBAN: HR8323600001101226102, ZABA Zagreb
Reg. No. (MBS): 080010093, Commercial Court in Zagreb
Stat. No. (MB): 3275531
PIN (OIB): 47911242222
Activity code: 4222 (Construction of utility projects for electricity and telecommunications)
The Company voluntarily uses its Code of Corporate Governance as defined by the Croatian Financial Services
Supervisory Agency (HANFA) and Zagreb Stock Exchange Inc.
In 2021, the Company substantially complied with and implemented recommendations provided in the Code by
publishing all information to be published under the applicable regulations and information of interest to
Company’s shareholders. The Company presents any events of significant noncompliance with
recommendations provided in Code in Annual Questionnaire provided to ZSE.
The Annual Corporate Governance Questionnaire for Dalekovod d.d. is available at www.zse.hr and on the
website of Dalekovod d.d. in the section intended for investors at http://www.dalekovod.hr/kodeks-
korporativnog-upravljanja.aspx.
According to the provisions of the Companies Act, the Supervisory Board supervises the Company’s business by
holding regular meetings where the Management Board presents the relevant reports. All issues within the
Supervisory Board’s scope of responsibility as defined by the Companies Act and the Articles of Association are
discussed at Supervisory Board’s meetings.
The Supervisory Board’s Supervision Report is part of the Annual Company Report submitted to the General
Meeting. In addition, the Supervisory Board is responsible for internal control and supervision via the Audit
Subcommittee which provides technical support to the Supervisory Board and the Management Board regarding
corporate governance, risk management, financial reporting and controlling duties.
In addition to the Audit Subcommittee, the Supervisory Board includes the Appointments and Rewards
Subcommittee and the Corporate Management Subcommittee. The Management Board is required to ensure
29
that the Company maintains its business accounts and other books and business records, prepares the relevant
accounting documents, realistically values its assets and liabilities, and prepares financial statements and other
reports in accordance with the applicable accounting regulations and standards and the applicable laws and
regulations. General Assemblies were held on 25 March 2022, 31 March 2022 and 30 June 2022.
The Company has defined its quality management policy which ensures and continuously improves quality of all
its activities in accordance with relevant statutory and professional requirements and other requirements of its
internal and external stakeholders.
The policy shall be governed by the following principles:
1. Ongoing improvement of customer satisfaction with products and services;
2. Ongoing development of fair relationships with suppliers;
3. Ongoing improvement of relationships with employees;
4. Ongoing improvement of product and service quality;
5. Building a collective spirit of belonging to the Company and development of teamwork while insisting
on high levels of responsibility and making substantial investments in professional training and
motivation.
The Quality Management System is continuously implemented and is responsibility of the Management Board,
Division Directors, Executives, Managers and all employees of the Company according to defined targets, tasks
and responsibilities in Company’s business.
In 2022, the Company actively took measures to promote gender equality across the Company. The focus was
on defining equal requirements irrespective of gender and age for new employment and internal reassignment
of employees.
Equal criteria also applied to the employment of executives in the Company, which provides for ongoing
progress. No differences in salaries for equal or equivalent positions were recorded.
The shares of professionals of all genders and age groups were roughly equal on all levels. As regards the
professional criteria, the Company uses a strategy for employment and development of management functions
for professions and education levels depending on the nature of each function and its requirements. The
Company also continuously provides trainings and educations for its employees for further improving and
developing their competencies.
30
31
RESPONSIBILITY FOR CONSOLIDATED AND SEPARATE
ANNUAL STATEMENTS
The Management Board of Dalekovod d.d., Marijana Čavića 4, Zagreb (the “Company”) and its subsidiaries
(jointly: the “Group”) is required to ensure that the Company’s and Group’s annual consolidated and separate
financial statements for each year are prepared in accordance with the Accounting Act (Official Gazette 78/15,
120/16) and the International Financial Reporting Standards (IFRS) adopted by the European Union to provide a
true and fair view of the financial position, business performance, cash flows and changes in equity for the
period.
Having conducted the relevant investigations, the Management Board reasonably expects the Company and the
Group to have appropriate funds to continue in business for the foreseeable future. Accordingly, the
Management Board prepared the annual consolidated and separate financial statements under the assumption
that the Company and the Group will continue in business on a going concern basis.
When preparing annual consolidated and separate financial statements, Management Board is responsible for:
• selecting and consistently applying appropriate accounting policies in accordance with the applicable financial
reporting standards;
• making reasonable and prudent judgments and estimates; and
• preparing annual consolidated and unconsolidated financial statements on a going concern basis unless such
basis is inappropriate to assume.
The Management Board is responsible for maintaining proper accounting records that will always reflect with
reasonable accuracy the financial position, business performance, cash flows and changes in equity of the
Company and the Group and their compliance with the Accounting Act and the International Financial Reporting
Standards. The Management Board is also responsible for safeguarding Company’s and Group’s assets, including
the taking of reasonable steps to prevent and detect any fraud or any other illegal activities.
The Management Board is also responsible for the preparation and content of Annual Report and Statement of
Compliance with the Code of Corporate Governance, in accordance with Croatian Accounting Law. The Annual
Report and the Statement of Compliance with the Code of Corporate Governance have been approved for issue
by the Management Board and signed in accordance with this. The Management Board is responsible for
submitting Annual Report together with the consolidated and separate financial statements to the Supervisory
Board. Subsequently, the Supervisory Board must approve the annual financial statements for their submission
to the General Shareholders' Meeting.
32
The Consolidated and Separate Financial Statements and the Annual Report were approved by the Management
Board on April 19, 2023, for submission to the Supervisory Board and signed below by:
Independent Auditors’ Report to the shareholders of Dalekovod d.d.
This version of the auditor’s report is a translation from the original, which was prepared in Croatian language. All possible care has been taken to ensure that the
translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of
the auditor’s report takes precedence over this translation.
33
Report on the Audit of the Financial Statements
Opinion
We have audited the separate financial statements of Dalekovod d.d. (“the Company”) and the consolidated
financial statements of the Company and its subsidiaries (“the Group”), which comprise the separate and
consolidated statements of financial position of the Company and the Group, respectively, as at 31 December 2022,
and their respective separate and consolidated statements of profit or loss and other comprehensive income,
changes in equity and cash flows for the year then ended, and notes, comprising significant accounting policies and
other explanatory information (hereinafter “the financial statements”).
In our opinion, the accompanying financial statements give a true and fair view of the unconsolidated financial
position of the Company and the consolidated financial position of the Group as at 31 December 2022, and of their
respective unconsolidated and consolidated financial performance and cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the European Union (“EU IFRS”).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing. Our responsibilities under those
standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of
our report. We are independent of the Company and the Group in accordance with the ethical requirements that are
relevant to our audit of the financial statements in Croatia and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independent Auditors’ Report to the shareholders of Dalekovod d.d. (continued)
This version of the auditor’s report is a translation from the original, which was prepared in Croatian language. All possible care has been taken to ensure that the translation
is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of the auditor’s report
takes precedence over this translation.
34
Report on the Audit of the Financial Statements (continued)
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
REVENUE RECOGNITION UNDER LONG-TERM (CONSTRUCTION) CONTRACTS
Revenue recognized from construction contracts recognized in profit or loss in 2022: the Group HRK 930,291 thousand; the
Company: HRK 710,486 thousand (90 and 100 per cent, respectively, of the total revenue amount for 2022). Please refer to the
Notes 2.20 of Significant accounting policies, Note 5 (a) of Key accounting estimates and judgements and Note 8 Segment
information in the financial statements.
Key audit matter
How our audit addressed the matter
The Group’s and the Company’s principal
activities include manufacturing of complex
power-generating equipment, its installation
and related construction services.
Consequently, contracts with customers
typically include one performance obligation
which is satisfied over time.
Under the applicable financial reporting
standard governing the accounting for
revenues, IFRS 15 Revenue from Contracts with
Customers, if the requirements for recognition
of revenue over time are met, entities
measure ‘progress to complete satisfaction’ of
the performance obligation using a method
that best depicts the performance.
Given the nature of contracts with customers,
revenue from contracts with customers is
recognised by reference to the ‘progress to
complete satisfaction’ of the performance
obligation which is typically calculated using
the ‘cost-to-cost’ input method which
measures the proportion of contract costs
incurred for work performed up to the
reporting date compared to the estimated
total contract costs required to satisfy the
performance obligation.
The accounting for long-term construction
contracts requires management to make
reliable estimates with respect to future costs
to completion of a contract and fulfilment of
contractual obligations.
This estimate directly impacts the amounts
and timing of revenue recognition since it
determines the stage of completion achieved
under the contract. As a result, we considered
this area to be a key audit matter.
Our audit procedures in this area included, among others:
• assessing the Group’s and the Company’s policy for recognizing revenue,
including whether the policy is in accordance with the relevant accounting
standards;
• testing the design, implementation and operating effectiveness of controls
related to:
o accuracy of budgeting process including effectiveness of management
review;
o approval of contract changes with particular focus on approval of
relevant changes in budgeted cost to completion;
• assessing the accuracy of contract budgets by analysing historical accuracy of
prior year budgets for completed contracts and contracts with significant
change in the stage of completion in the current year;
• for a sample of contracts with key customers:
o challenging management’s identification of performance obligations,
particularly with respect to the evaluation of whether the contract
relates to a single performance obligation;
o challenging management’s assessment of whether the identified
performance obligation meets the criteria for recognising revenue over
time vs. at a point-in-time, by reference to the provisions of the
contract and our understanding of the resulting pattern of satisfying
the performance obligation;
o challenging the appropriateness of the method used to measure
‘progress to complete satisfaction’ (cost-to-cost vs. output based on
surveys of work performed) by considering contractual terms and the
nature of goods or services promised to customers;
• for a sample of contracts evaluating the appropriateness of the estimated
‘progress to complete satisfaction’ as at year-end by reference to the
provisions of the contract and other supporting documents, such as budgets,
progress reports and/or surveys of work performed;
• for significant subsequent changes in contracts inspecting their formal
approvals by customers;
• assessing the adequacy of disclosures regarding estimation uncertainty
involved in the accounting for construction contracts.
Independent Auditors’ Report to the shareholders of Dalekovod d.d. (continued)
This version of the auditor’s report is a translation from the original, which was prepared in Croatian language. All possible care has been taken to ensure that the
translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of
the auditor’s report takes precedence over this translation.
35
Report on the Audit of the Financial Statements (continued)
Key Audit Matters (continued)
IMPAIRMENT OF INVESTMENTS IN SUBSIDIARIES
As at 31 December 2022, investments in subsidiaries in the separate financial statements amounted to HRK 48,906 thousand.
During the year the reversal of impairment loss on investments in subsidiaries of HRK 2,000 thousand was recognised. Please
refer to notes 2.2 (a) and 2.9 of Significant accounting policies and note 22 Investments in subsidiaries in the financial
statements.
Key audit matter
How our audit addressed the matter
In accordance with the relevant financial reporting
standards, the Company is required to perform an
impairment test for assets for which impairment indicators
were identified.
Due to the magnitude of investments in subsidiaries (as well
as total exposure toward these entities, calculated as the
sum of the carrying amounts of the investments and related
loans and receivables, net of related liabilities), identification
of the impairment indicators for any such subsidiaries at the
reporting date and testing for potential impairment requires
significant management judgement.
Where impairment indicators are identified for a certain
exposure, the Company tests the impairment by
determining the recoverable amount of the assets and
comparing it with their carrying values.
The recoverable amounts are determined, with the
assistance from external and internal appraisers, as fair
values of the underlying subsidiaries, measured using
appropriate valuation techniques, e.g. discounted cash flow
models of the underlying entity, supplemented, where
available, by comparable valuation multiples or prices
achieved in actual market transaction for comparable
entities.
The determination of the recoverable amount requires
making a number of assumptions and judgements, in
particular those relating to the selection and application of
valuation models, future cash flow projections and the
appropriateness of used valuation multiples, and
comparable transactions. Future cash flow projections are
subject to significant variability due to changing market
conditions and environment. Key assumptions relate to
discount rate used and cash flows growth rate in the residual
period. A minor change in these assumptions may have a
significant impact on the recoverable amount.
As a result, this area required our significant judgment and
increased attention in the course of our audit and
consequently we considered it to be a key audit matter.
Our audit procedures in this area included, among others:
• evaluating, against the relevant requirements of the financial
reporting standards, the process of management’s
identification of impairment indicators, considering factors
such as unfavourable developments in the industry, negative or
insufficient net assets, changing laws and regulations, declining
financial performance, existence of any overdue loans and
receivables and/or rolling of existing facilities, and changing
business models;
• assessing the appropriateness of valuation methodology
applied for impairment testing against the relevant
requirements of financial reporting standards. As part of the
above, we identified the relevant methods, assumptions and
sources of data, and assessed whether such methods,
assumptions, data and their application are appropriate in the
context of the said requirements;
• assessing competence, capabilities and objectivity of internal
and external appraisers engaged by the Company;
• assisted by our own valuation specialists, challenging the key
assumptions used by management in its impairment testing,
which specifically involved:
o evaluating the historical accuracy of management
budgeting by comparing historical cash flow projections
with actual outcomes;
o challenging the key macroeconomic assumptions applied
(such as discount rates and growth rates in the residual
period) by reference to publicly available external sources
and data on historical financial performance;
o analysing sensitivity of the impairment test results to
changes in key assumptions and considering whether the
level of key assumptions indicates management bias;
• evaluating the adequacy and completeness of disclosures in
the financial statements with respect to impairment testing
against the relevant requirements of the financial reporting
standards.
Independent Auditors’ Report to the shareholders of Dalekovod d.d. (continued)
This version of the auditor’s report is a translation from the original, which was prepared in Croatian language. All possible care has been taken to ensure that the
translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of
the auditor’s report takes precedence over this translation.
36
Report on the Audit of the Financial Statements (continued)
Other Information
Management is responsible for the other information. The other information comprises the Management Report
and Statement of Compliance with the Code of Corporate Governance included in the Annual Report of the
Company and the Group, but does not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
With respect to the Management Report and Statement of Compliance with the Code of Corporate Governance, we
also performed procedures required by the Accounting Act in Croatia (“Accounting Act”). Those procedures include
considering whether:
• the Management Report has been prepared in accordance with the requirements of Articles 21 and 24 of
the Accounting Act;
• the Statement of Compliance with the Code of Corporate Governance includes the information specified in
Article 22 of the Accounting Act.
Based solely on the work required to be undertaken in the course of the audit of the financial statements and
procedures above, in our opinion:
• the information given in the Management Report and Statement of Compliance with the Code of Corporate
Governance for the financial year for which the financial statements are prepared, is consistent, in all
material respects, with the financial statements;
• the Management Report has been prepared, in all material respects, in accordance with the requirements
of Articles 21 and 24 of the Accounting Act, respectively;
• the Statement of Compliance with the Code of Corporate Governance includes the information specified in
Article 22 of the Accounting Act.
In addition, in light of the knowledge and understanding of the entity and its environment obtained in the course of
the audit, we are also required to report if we have identified material misstatements in the Management Report
and Statement of Compliance with the Code of Corporate Governance. We have nothing to report in this respect.
Independent Auditors’ Report to the shareholders of Dalekovod d.d. (continued)
This version of the auditor’s report is a translation from the original, which was prepared in Croatian language. All possible care has been taken to ensure that the
translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of
the auditor’s report takes precedence over this translation.
37
Report on the Audit of the Financial Statements (continued)
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation of the financial statements that give a true and fair view in
accordance with EU IFRS, and for such internal control as management determines is necessary to enable the
preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Company or the Group or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s and the Group’s financial reporting
process.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with International Standards on Auditing, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Company’s and the Group’s internal controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s and the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the
related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However,
future events or conditions may cause the Company and the Group to cease to continue as a going concern.
Independent Auditors’ Report to the shareholders of Dalekovod d.d. (continued)
This version of the auditor’s report is a translation from the original, which was prepared in Croatian language. All possible care has been taken to ensure that the
translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of
the auditor’s report takes precedence over this translation.
38
Report on the Audit of the Financial Statements (continued)
Auditors’ Responsibilities for the Audit of the Financial Statements (continued)
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial statements of the Group. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal controls that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
We were appointed by those charged with governance on 30 June 2022 to audit the financial statements of the
Company and the Group for the year ended 31 December 2022. Our total uninterrupted period of engagement is six
years, covering the period from the year ended 31 December 2017 to the year ended 31 December 2022.
We confirm that:
• our audit opinion is consistent with the additional report presented to the Audit Committee of the
Company dated 17 April 2023;
• for the period to which our statutory audit relates, we have not provided any prohibited non-audit services
referred to in Article 44 of the Audit Act. We also remained independent of the audited entity in conducting
the audit.
The engagement partner on the audit resulting in this independent auditors’ report is Igor Gošek.
Independent Auditors’ Report to the shareholders of Dalekovod d.d. (continued)
This version of the auditor’s report is a translation from the original, which was prepared in Croatian language. All possible care has been taken to ensure that the
translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of
the auditor’s report takes precedence over this translation.
39
Report on Other Legal and Regulatory Requirements (continued)
Report on Compliance with the ESEF Regulation
In accordance with the requirements of Article 462 paragraph 5 of Capital Market Act, we are required to express a
conclusion on compliance of the separate and consolidated financial statements of the Company and the Group, as
included in the attached electronic file “dalekovoddd-2022-12-31-en”, with the requirements of the Commission
Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European
Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic
reporting format (the “RTS on ESEF”).
Responsibilities of Management and Those Charged with Governance
Management is responsible for the preparation of the separate and consolidated financial statements in a digital
format that complies with the RTS on ESEF. This responsibility includes:
• the preparation of the separate and consolidated financial statements in the applicable xHTML format and their
publication;
• the selection and application of appropriate iXBRL tags, using judgment where necessary;
• ensuring consistency between digitised information and the separate financial statements presented in human-
readable format; and
• the design, implementation and maintenance of internal control relevant to the application of the RTS on ESEF.
Those charged with governance are responsible for overseeing the Company’s and Group’s ESEF reporting, as a part
of the financial reporting process.
Auditors' Responsibilities
Our responsibility is to express a conclusion, based on evidence obtained, as to whether the separate and
consolidated financial statements comply, in all material respects, with the RTS on ESEF. We conducted our
reasonable assurance engagement in accordance with International Standard on Assurance Engagements 3000
(Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information (ISAE 3000)
issued by the International Auditing and Assurance Standards Board.
Work performed
A reasonable assurance engagement in accordance with ISAE 3000 involves performing procedures to obtain
evidence about compliance with the RTS on ESEF. The nature, timing and extent of procedures selected depend on
the auditor’s judgment, including the assessment of the risks of material departures from the requirements of set
out in the RTS on ESEF, whether due to fraud or error. Reasonable assurance is a high degree of assurance. However,
it does not guarantee that the scope of procedures will identify all significant (material) non-compliance with the
RTS on ESEF.
In respect of the subject matter, we have performed the following procedures:
• obtaining an understanding of the tagging process;
• evaluating the design and implementation of relevant controls over the tagging process
• tracing the tagged data to the separate and consolidated financial statements of the Company and the Group
presented in human-readable format;
• evaluating the completeness of the Company’s and the Group’s tagging of the separate and consolidated financial
statements;
• evaluating the appropriateness of the use of iXBRL elements selected from the ESEF taxonomy used and creation
of extension elements where no suitable element in the ESEF taxonomy has been identified;
• evaluating the use of anchoring in relation to the extension elements; and
• evaluating the appropriateness of the format of the separate and consolidated financial statements.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
Independent Auditors’ Report to the shareholders of Dalekovod d.d. (continued)
This version of the auditor’s report is a translation from the original, which was prepared in Croatian language. All possible care has been taken to ensure that the
translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of
the auditor’s report takes precedence over this translation.
40
Report on Other Legal and Regulatory Requirements (continued)
Report on Compliance with the ESEF Regulation (continued)
Conclusion
In our opinion, based on the procedures performed and evidence obtained, the separate and consolidated financial
statements of the Company and the Group as at and for the year ended 31 December 2022 presented in ESEF
format and contained in the aforementioned attached electronic file, have been prepared, in all material respects, in
accordance with the requirements of the RTS on ESEF.
Our conclusion does not represent an opinion on the true and fair view of the financial statements as this is included
in our Report on the Audit of the Financial Statements.
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
The accounting policies and notes form an integral part of these financial statements.
41
Dalekovod Group
Dalekovod d.d.
(all amounts are expressed in
thousands of HRK)
Note
2022.
2021.
2022.
2021.
Sales revenue
8
Other income
8, 9
Change in work in progress and
finished goods
(185 )
(2,129 )
Cost of trade goods sold
(117,532 )
(237,986 )
(49,351 )
(196,109 )
Cost of materials and services
10
(503,872 )
(620,721 )
(401,516 )
(396,550 )
Staff costs
11
(285,695 )
(325,417 )
(206,485 )
(249,831 )
Depreciation and amortisation
18-
21
(29,982 )
(31,730 )
(27,329 )
(26,830 )
Other operating expenses
12
(97,017 )
(122,063 )
(67,524 )
(105,999 )
Other gains/(losses) – net
13
Operating gain/(loss)
Finance income
14
Finance costs
14
(11,136 )
(30,648 )
(10,521 )
(30,651 )
(3,634 )
(19,371 )
(14,542 )
Profit / (loss) before tax
Income tax
15
(5,973 )
(8,274 )
(4,777 )
(6,918 )
Net profit / (loss) from continuing
operations
Net profit / (loss) from discontinued
operations
(768 )
(179 )
(406 )
(1,262 )
Net profit / (loss)
1,971
Net profit / (loss) attributable to:
Equity holders of the Company
1,971
Non-controlling interests
Net profit / (loss)
1,971
Basic profit / (loss) per share (in HRK)
16
0.18
1.29
-
-
Diluted profit / (loss) per share (in
HRK)
16
0.18
1.29
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
The accounting policies and notes form an integral part of these financial statements.
42
Dalekovod Group
Dalekovod d.d.
(all amounts are expressed in
thousands of HRK)
Note
2022.
2021.
2022.
2021.
Net profit / (loss)
Other comprehensive income
/ (loss):
Gain on revaluation of assets
19,
32
Other
(295 )
Total other comprehensive
income / (loss)
Total comprehensive income /
(loss)
Comprehensive income / (loss)
attributable to:
Equity holders of the Company
Total comprehensive income /
(loss)
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
The accounting policies and notes form an integral part of these financial statements.
43
Dalekovod Group
Dalekovod d.d.
(all amounts are expressed in thousands
of HRK)
Note
2022.
2021.
2022.
2021.
ASSETS
Intangible assets
18
Property, plant and equipment
19
Prepayments
Investment property
20
Investments in subsidiaries
22
Investments in associates
23
Loans and receivables
26
Non-current assets
Inventories
27
Trade and other receivables
28
Receivables for subscribed but unpaid
capital
28
Income tax receivable
Cash and cash equivalents
29
Assets held for sale
37
Current assets
Total assets
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITION (continued)
AS AT 31 DECEMBER 2022
The accounting policies and notes form an integral part of these financial statements.
44
Dalekovod Group
Dalekovod d.d.
(all amounts are expressed in
thousands of HRK)
Note
2022.
2021.
2022.
2021.
EQUITY AND LIABILITIES
Share capital
30
Legal reserves
30
Treasury shares
30
(8,466 )
(8,466 )
(8,466 )
(8,466 )
Statutory and other reserves
30
Revaluation reserves
30
Translation reserves
(5,011 )
(4,586 )
Accumulated loss
(2,886 )
(8,366 )
(12,137 )
Shareholders' equity
Non-controlling interests
Total equity
Borrowings
31,
21
Provisions
34
Trade and other payables
33
Deferred tax liability
15
Non-current liabilities
Borrowings
31,
21
Mezzanine debt
32
Provisions
34
Trade and other payables
33
Income tax payable
Liabilities held for sale
37
Current liabilities
Total liabilities
Total equity and liabilities
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
The accounting policies and notes form an integral part of these financial statements.
45
Group
(all amounts are expressed in
thousands of HRK)
Note
Share
capital
Share
premium
Legal
reserves
Treasury
shares
Statutory
and other
reserves
Revaluation
reserves
Translation
reserve
Accumulated
loss
Total
At 1 January 2021
(8,466 )
(4,588 )
(393,474 )
Net profit/(loss)
Other comprehensive
income/(loss)
(297 )
Total comprehensive
income/(loss)
(297 )
Share capital decrease
30
(244,721 )
(86,142 )
(11,486 )
(32,188 )
Share capital increase
Transactions with owners
(86,142 )
(11,487 )
(32,188 )
At 31 December 2021
(8,466 )
(4,586 )
(2,886 )
Net profit/(loss)
Other comprehensive
income/(loss)
(425 )
Total comprehensive
income/(loss)
(425 )
At 31 December 2022
(8,466 )
(5,011 )
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
The accounting policies and notes form an integral part of these financial statements.
46
Company
(all amounts are expressed
in thousands of HRK)
Note
Share
capital
Share
premium
Legal
reserves
Treasury
shares
Statutory and
other
reserves
Revaluation
reserves
Accumulated loss
Total
At 1 January 2021
(8,466 )
(398,109 )
Net profit/(loss)
Other comprehensive
income/(loss)
Total comprehensive
income/(loss)
Decrease in share capital
30
(244,721 )
(86,142 )
(11,487 )
(32,188 )
Increase in share capital
Transactions with owners
(86,142 )
(11,487 )
(32,188 )
At 31 December 2021
(8,466 )
(12,137 )
Net profit/(loss)
Other comprehensive
income/(loss)
Total comprehensive
income/(loss)
At 31 December 2022
(8,466 )
(8,366 )
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
The accounting policies and notes form an integral part of these financial statements.
47
Dalekovod Group
Dalekovod d.d.
(all amounts are expressed in
thousands of HRK)
Note
2022
2021
2022
2021
Profit/(loss) before tax
Adjustments:
Depreciation and amortisation
18-21
Revaluation
(998 )
(999 )
Loss/(gain) on sale of property,
plant and equipment
13
(44)
(134 )
(37 )
Fair value of pre bankruptcy
liabilities
9, 12
Impairment of trade receivables
and loans receivable
12
(478 )
Capitalization of salary costs
18
(618 )
(618 )
Impairment of investments in
subsidiaries
12.22
(2,000 )
Impairment of inventories and
inventory shortages
12
Net change in provisions
36
(4,015 )
(3,724 )
(2,298 )
(3,945 )
Dividend income
14
(2,113 )
(4,900 )
Unrealised foreign exchange
differences
(614 )
(651 )
Interest income
14
(140 )
(347 )
(616 )
(530 )
Transfer to assets intended for sale
Income from unwinding of
discount
14
(923 )
(923 )
(867 )
Other finance income
13
(91 )
(91 )
Interest expenses
14
Changes in working capital:
Trade and other receivables
(119,656)
(137,326)
Inventories
(6,242 )
(646 )
(397 )
(585 )
Trade and other payables
(37,453 )
(27,176 )
Net cash generated from
operating activities
(79,593 )
(76,043 )
Interest paid
(36,614)
(1,737 )
(37,047)
(1,810 )
Tax paid
(8,944)
(1,111 )
(7,962)
Net cash flows from operating
activities
(125,151 )
(121,052 )
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
The accounting policies and notes form an integral part of these financial statements.
48
Dalekovod Group
Dalekovod d.d.
(all amounts are expressed in
thousands of HRK)
Note
2022
2021
2022
2021
Cash flows from investing
activities
Acquisition of intangible assets
18
(4,546 )
(37 )
(4,530 )
(16 )
Acquisition of property, plant and
equipment
19
(5,015 )
(42,600 )
(2,837 )
(42,451 )
Acquisition of investment property
20
(470 )
Proceeds from sale of property,
plant and equipment
Net change in deposits
Loans given
(304 )
(5,361 )
(14,197 )
Repayments of loans given
Proceeds from share in profits
Interest received
Net cash flows used in investing
activities
(6,201 )
(33,877 )
(5,389 )
(43,786 )
Cash flows from financing
activities
Proceeds from borrowings
Repayment of borrowings
(255,831)
(7,900 )
(256,056)
(9,218 )
Repayment of mezzanine
(31,049)
(35,863 )
Redemption of bonds
(1,358 )
(1,308 )
(1,792 )
(1,727 )
Repayment of lease liabilities
(26,998 )
(7,636 )
(26,453 )
(4,490 )
Share based payment transactions
30
Net cash flows from / (used in)
financing activities
(16,844 )
(15,435 )
Net increase / (decrease) in cash
(29,333 )
(6,258 )
(29,350 )
(78 )
Cash at beginning of year
Cash at end of year
29
Net increase / (decrease) in cash
(29,333 )
(6,258 )
(29,350 )
(78 )
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
49
NOTE 1 – GENERAL INFORMATION
At 31 December 2022 the Dalekovod Group (the Group) comprises of the parent company Dalekovod
subsidiary and one entity run as joint venture (2021: 14 subsidiaries owned by the parent company
and one entity run as joint venture) – note 22 and 24.
Dalekovod d.d., Zagreb (the Company) was incorporated in compliance with the laws and regulations
of the Republic of Croatia Zagreb , Marijana Čavića 4 street .
Exchange.
The Company’s principal activity is the engineering, production, construction and installation of
electric power facilities, facilities for road, railroad and mass transit and telecommunication
Management Board
Management Board members of the Company as at 31 December 2022 were: Mr. Tomislav Rosandić
(President of the Management Board), Mr. Eugen Paić-Karega (Member of the Management Board),
Mr. Ivan Kurobasa (Member of the Management Board) and Mr. Tvrtko Zlopaša (Member of the
Management Board).
The Management Board of the Company on 31 March 2022 consists of Mr. Tomislav Rosandić
(President of the Board), Mr. Ivan Kurobasa (Member of the Management Board), Mr. Eugen Paić-
Karega (Member of the Management Board) and Mr. Tvrtko Zlopaša (Member of the Management
Supervisory Board
Members of the Supervisory Board as at 31 December 2022 were: Mr. Gordan Kolak (President of the
Supervisory Board), Mr. Josip Jurčević (Vice president of the Supervisory Board), Mr. Josip Lasić
(Member of the Supervisory Board), Mr. Dražen Buljić (Member of the Supervisory Board), Mr. Božidar
Poldrugač (Member of the Supervisory Board), Mr. Damir Spudić (Member of the Supervisory Board)
and Mr. Pavao Vujnovac (Member of the Supervisory Board). New members of the Supervisory Board
were appointed on April 11, 2022.
The Supervisory Board of the Company on 31 March 2022 consists of: Mr. Dinko Novoselec
(Chairman of the Supervisory Board), Mrs. Irena Weber (Deputy Chairman of the Supervisory Board),
Krešimir Kukec (Member of the Supervisory Board), Drazen Buljić (Member of the Supervisory Board)
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
50
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out
below. These policies are applicable to both the Group and to the Company and they have been
2.1 Basis of preparation
The consolidated financial statements of the Group and the separate financial statements of the
Company have been prepared in accordance with International Financial Reporting Standards as
adopted by the European Union (IFRS) under the historical cost convention, except with aspect to the
revaluation of land, buildings, financial assets at fair value through profit or loss and investments in
equity instruments through other comprehensive income.
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying
the Group’s and the Company’s accounting policies. The areas involving a higher degree of judgement
or complexity, or areas where assumptions and estimates are significant to the financial statements,
are disclosed in note 5.
The amounts in these financial statements are rounded to the nearest thousand, unless otherwise
stated.
The financial statements have been prepared on a going concern basis, which is analysed in more detail
in Note 7.
Standards, interpretations and amendments to published standards that are not yet effective
Certain new standards, amendments to standards and interpretations have been released and are
effective but not mandatory for the year ended 31 December 2020 and/or are not yet adopted by the
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
51
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2 Consolidation
(a) Subsidiaries
In the separate financial statements, the Company carries investments in subsidiaries at cost less
impairment. Investments are tested annually for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. Investments in subsidiaries
that suffered an impairment in previous periods are reviewed for possible reversal of the impairment
at each reporting date.
Subsidiaries are all entities over which the Group has the power to govern the financial and operating
policies generally accompanying a shareholding of more than one half of the voting rights. The
existence and effect of potential voting rights that are currently exercisable or convertible are
considered when assessing whether the Group controls another entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group (acquisition date) and are
deconsolidated from the date of sale or date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group.
The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued
and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the
acquisition. The date of exchange is the acquisition date where a business combination is achieved in
a single transaction, and is the date of each share purchase where a business combination is achieved
in stages by successive share purchases.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination
are measured initially at their fair values at the acquisition date, irrespective of the extent of any
minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the
identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair
value of the net assets of the acquired, the difference is recognised directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions between Group companies
are eliminated on consolidation. Unrealised losses are also eliminated, unless there is evidence of
impairment of transferred assets. Accounting policies of subsidiaries are changed where necessary to
ensure consistency with the policies adopted by the Group.
(b) Changes in ownership of subsidiaries without loss of control
The Group treats transactions with non-controlling interests as transactions with equity owners of the
Group. For purchases from non-controlling interests, the difference between any consideration paid
and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
52
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2 Consolidation (continued)
(c) Disposal of subsidiaries
When the Group loses control or significant influence, all retained interest in the entity are re-
measured to their fair value, with a change in carrying amount recognised in profit or loss. The fair
value is the initial carrying amount for the purposes of subsequently accounting for the retained
interest as an associate, joint venture or financial asset. Furthermore, all amounts previously
recognised in other comprehensive income in respect of that entity are accounted for as if the Group
had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss. If the ownership interest
in an associate is reduced but significant influence is retained, only a proportionate share of the
amounts previously recognised in other comprehensive income are reclassified to profit or loss where
appropriate.
(d) Associates
Associates are all entities over which the Group or the Company have significant influence but not
control, generally accompanying a shareholding of between 20% and 50% of the voting rights. The
Group accounts for investments in associates using the equity method and the Company accounts for
them at cost.
The Group’s share of its associates’ post-acquisition profits or losses is recognised in the income
statement, and its share of post-acquisition movements in other comprehensive income is recognised
in other comprehensive income. The cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. When the Group’s share of losses is equal to or exceeds its
ownership interest in the associate, including any other unsecured receivables, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of
the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred. Accounting policies of associates are
being changed where necessary to ensure consistency with the policies adopted by the Group.
(e) Mergers
The predecessor method of accounting is used to account for the merger of entities under common
control. The carrying value of assets and liabilities of the predecessor entity are transferred as balances
in the merged entity. On the date of the merger, inter-company transactions, balances and unrealised
gains and losses on transactions between the two entities merging are eliminated. Any difference
between the carrying value of net assets merged and net assets given up is recorded as equity. Mergers
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
53
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2 Consolidation (continued)
(f) Joint ventures
The Group's interest in a jointly controlled entity is accounted for using the equity method of
accounting and is initially recognised at cost. Under the equity method, the Group’s share of post-
acquisition profits or losses is recognised in the income statement, whereas its share of post-
acquisition movements in other comprehensive income is recognised in other comprehensive income.
The cumulative post-acquisition movements are adjusted against the carrying amount of the
2.3 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision-maker, responsible for allocating
resources and assessing performance of the operating segments, has been identified as the
2.4 Foreign currencies
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (‘the functional currency’).
The consolidated financial statements are presented in Croatian Kuna (HRK), which is the Company’s
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the income statement.
(c) Group companies
The results and financial position of all the Group entities that have a functional currency different
from the presentation currency are translated into the presentation currency as follows:
(i) assets and liabilities for each balance sheet presented are translated at the closing rate at
the date of that balance sheet;
(ii) income and expenses for each income statement are translated at average exchange rates;
and
(iii) all resulting exchange differences are recognised as a separate component of equity.
At consolidated level, exchange differences arising from the translation of the net investment in
foreign operations are taken to ‘Cumulative foreign exchange differences’ within shareholders’ equity.
When a foreign operation is partially disposed of or sold and control over the subsidiary is lost,
exchange differences that were recorded in equity are recognised in the income statement as part of
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
54
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.5 Property, plant and equipment
2.5.1 Property, plant and equipment
Land, buildings and other tangible assets, except assets under foreclosure, are carried in the balance
sheet at historical cost less accumulated depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance are charged to the income statement during
the financial period in which they are incurred.
Land and assets under construction are not depreciated. Depreciation is calculated using linear method
individually for each asset through estimated life expectancy of asset in use. Depreciation is calculated
when asset is available and ready to use. Depreciation is calculated using the straight-line method to
allocate their cost to their residual values over their estimated useful lives, as follows:
The residual value of an asset is the estimated amount that the Group would currently obtain from
disposal of the asset less the estimated costs of disposal, if the asset were already of the age and in
the condition expected at the end of its useful life. The residual value of an asset is nil if the Group
expects to use the asset until the end of its physical life. The assets’ residual values and useful lives are
reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount (note 2.8).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. Gains and
losses are included in the line item “other gain/ (loss)– net” in the income statement.
Useful live in years
Buildings
20 – 40
Equipment
5 – 10
Machinery
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
55
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.5 Property, plant and equipment (continued)
Assets are carried at fair value based on periodic, but at least triennial, valuations by external
independent assessors.
Increases in the carrying amount of assets arising on revaluation are credited to other comprehensive
income and presented in equity under revaluation reserves. Decreases that offset previous increases
of the same asset are charged against revaluation reserves directly in equity, all other decreases are
charged to the income statement.
Land after initial recognition is stated at a revalued amount based on its fair value at the date of
revaluation less any subsequently accumulated impairment losses. Independent estimates of land
values are made when the carrying amount is significantly different from the fair value. Any increase
in the value of the land is recorded within other comprehensive income on the revaluation reserve
position, unless and only to the extent to which it reverses an impairment of the same asset that was
previously recognized as an expense in which case is recognised as income.
Any impairment is first offset by an increase that relates to an earlier valuation of the value of the same
asset and is subsequently recognized as an expense. The relevant part of the revaluation reserves
made during the previous valuation of the value is released from the revaluation reserves directly to
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
56
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.6 Investment property
2.6.1 Investment property
Investment property, principally comprising office buildings and land, is held for long-term rental yields
or appreciation. Investment property is treated as a long-term investment unless it is intended to be
sold in the next year and a buyer has been identified, in which case it is classified within current assets.
Investment property is carried at historical cost less accumulated depreciation and provision for
impairment, where required. Depreciation for buildings is calculated using the straight-line method to
allocate cost over estimated useful life (20 to 40 years).
Subsequent costs are capitalised only when it is probable that future economic benefits associated
with it will flow to the Group and the cost can be measured reliably. All other repairs and maintenance
costs are expensed when incurred. If an investment property becomes owner-occupied, it is
reclassified to property, plant and equipment, and its carrying amount at the date of reclassification
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
57
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.7 Intangible assets
(a) Goodwill
Goodwill represents the excess of the acquisition cost over the carrying value of the Group’s share of
the net identifiable assets of the acquired business sector at the acquisition date. Goodwill on
acquisition is included in intangible assets.
Separately recognised goodwill is tested annually for impairment, or whenever there are indications
of impairment, and is carried at cost less accumulated impairment losses. Impairment losses on
goodwill are not reversed.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is
made to those cash-generating units that are expected to benefit from the business combination in
which the goodwill arose, identified by business segment. If a part or the whole cash generating unit
is sold, the related goodwill is included in the carrying amount of net assets sold when determining
gain or loss on the transaction.
(b) Rights of use and computer software
Rights of use and computer software are capitalised on the basis of the costs incurred to bring to use
the specific software. These costs are amortised over their estimated useful lives (5 years).
2.8 Impairment of non-financial assets
Assets that have an indefinite useful life (such as land or goodwill) which are not subject to
amortisation are tested annually for impairment. Assets that are subject to amortisation and
depreciation are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
58
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.9 Financial instruments
2.9.1 Financial assets
(a) Recognition and initial measurement
Trade receivables are initially recognised when they are originated. All other financial assets are
initially recognised when the Group becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) is initially
measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to
its acquisition or issue. A trade receivable without a significant financing component is initially
measured at the transaction price.
(b) Classification and subsequent measurement
On initial recognition, a financial asset is classified as measured at:
- amortised cost;
- FVOCI (fair value through other comprehensive income) – debt investment;
- FVOCI – equity investment;
- or FVTPL (fair value through profit or loss).
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes
its business model for managing financial assets, in which case all affected financial assets are
reclassified on the first day of the first reporting period following the change in the business model.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not
designated as at FVTPL:
- it is held within a business model whose objective is to hold assets to collect contractual cash
flows; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not
designated as at FVTPL:
- it is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
During initial recognition of an equity investment that is not held for trading, the Group may
irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
59
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.9 Financial instruments (continued)
2.9.1 Financial assets (continued)
(b) Classification and subsequent measurement (continued)
All financial assets not classified as measured at amortised cost or FVOCI as described above are
measured at FVTPL. This includes all derivative financial assets. During initial recognition, the Group
may irrevocably designate a financial asset that otherwise meets the requirements to be measured at
amortised cost or at FVOCI as at FVTPL, if doing so, eliminates or significantly reduces an accounting
mismatch that would otherwise arise.
Trade receivables are held as part of the business model of holding until collection.
Business model assessment
The Group makes an assessment of the objective of the business model in which a financial asset is
held at a portfolio level because this best reflects the way the business is managed and information is
provided to management. The information considered includes:
- the stated policies and objectives for the portfolio and the operation of those policies in
practice. These include whether management’s strategy focuses on; earning contractual interest
income; maintaining a particular interest rate profile; matching the duration of the financial
assets to the duration of any related liabilities or expected cash outflows; or realising cash flows
through the sale of the assets;
- how the performance of the portfolio is evaluated and reported to the Group’s management;
- the risks that affect the performance of the business model (and the financial assets held
within that business model) and how those risks are managed;
- how managers of the business and/or the portfolio are compensated – e.g. whether
compensation is based on the fair value of the assets managed or the contractual cash flows
collected; and
- the frequency, volume and timing of sales of financial assets in prior periods, the reasons for
such sales and expectations about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are
not considered sales for this purpose, consistent with the Group’s continuing recognition of the assets.
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
60
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.9 Financial instruments (continued)
2.9.1 Financial assets (continued)
(b) Classification and subsequent measurement (continued)
Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on
initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit
risk associated with the principal amount outstanding during a particular period of time and for other
basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
When assessing the baseline criteria of whether the contractual cash flows are solely payments of
principal and interest, the Group considers the contractual terms of the instrument. This includes
assessing whether the financial asset contains a contractual term that could change the timing or
amount of contractual cash flows such that the basic criterion would not be met. In making this
assessment, the Group considers:
- contingent events that could change the amount or timing of cash flows;
- terms that may adjust the contractual coupon rate, including variable‑rate features;
- prepayment and extension features; and
- terms that limit the Group’s claim to cash flows from specified assets (e.g. non‑recourse
features).
A prepayment feature is consistent with the ‘solely payments of principal and interest’ criterion if the
prepayment amount substantially represents unpaid amounts of principal and interest on the principal
amount outstanding, which may include reasonable additional compensation for early termination of
the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual
amount, a feature that permits or requires prepayment at an amount that substantially represents the
contractual par amount plus accrued (but unpaid) contractual interest (which may also include
reasonable additional compensation for early termination) is treated as consistent with this criterion
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
61
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.9 Financial instruments (continued)
2.9.1 Financial assets (continued)
(b) Classification and subsequent measurement (continued)
Subsequent measurement and recognition of gains and losses
The table below provides an overview of key features of the accounting policy that the Group applies
with respect to subsequent measurement of financial assets and recognition of gains and losses per
each type of financial asset:
(c) Derecognition
The Group derecognises a financial asset when the contractual rights to the cash flows from the
financial asset expire, or when it transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of ownership of the financial asset are
transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards
of ownership and it does not retain control of the financial asset.
When the Group enters into transactions whereby it transfers financial assets recognised in its
statement of financial position but retains either all or substantially all of the risks and rewards of the
transferred assets, the transferred assets are not derecognised.
Financial assets at
FVTPL
These assets are subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognized in profit or loss.
Financial assets at
amortised cost
These assets are subsequently measured at amortized cost using the effective
interest method. The amortized cost is reduced by impairment losses. Interest
income, foreign exchange gains and losses and impairment losses are
recognized in profit or loss. Any gain or loss on derecognition is recognized in
profit or loss.
Debt investments
at FVOCI
These assets are subsequently measured at fair value. Interest income
calculated using the effective interest method, foreign exchange gains and
losses and impairment are recognized in profit or loss. Other net gains and
losses are recognized in OCI. On derecognition, gains and losses accumulated in
OCI are reclassified to profit or loss.
Equity
investments
at FVOCI
These assets are subsequently measured at fair value. Dividends are recognized
as income in profit or loss unless the dividends clearly represents a recovery of
part of the cost of the investment. Other net gains and losses are recognized in
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
62
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.9 Financial instruments (continued)
2.9.2 Financial liabilities
(a) Recognition and initial measurement
Debt securities issued are initially recognised when they incurred. All other financial liabilities are
initially recognised when the Group becomes a party to the contractual provisions of the instrument.
A financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs
that are directly attributable to its acquisition or issue.
(b) Classification and subsequent measurement
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified
as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as at FVTPL on initial
recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including
any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently
measured at amortised cost using the effective interest method. Interest expense and foreign
exchange gains and losses are recognised in profit or loss. Any gain or loss at derecognition is also
recognised in profit or loss.
(c) Derecognition
The Group derecognises a financial liability when its contractual obligations are discharged or
cancelled, or expire. The Group also derecognises a financial liability when its terms are modified and
the cash flows of the modified liability are substantially different, in which case a new financial liability
based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and
the consideration paid (including any non‑cash assets transferred or liabilities assumed) is recognised
2.9.3 Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group currently has a legally enforceable right to set off
the amounts and it intends either to settle them on a net basis or to realise the asset and settle the
liability simultaneously.
2.9.4 Derivative financial instruments
The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk
exposures. Embedded derivatives are separated from the host contract and accounted for separately
if the host contract is not a financial asset and certain criteria are met. Derivatives are initially
measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
63
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.9 Financial instruments (continued)
2.9.5 Impairment of non-derivative financial assets
Recognition of loss allowances
The Group recognises loss allowances for ECLs on:
- financial assets measured at amortised cost;
- debt investments measured at FVOCI; and
- contract assets.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following,
which are measured at 12‑month ECLs:
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank balances for which credit risk (i.e. the risk of default
occurring over the expected life of the financial instrument) has not increased
significantly since initial recognition.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to
lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers reasonable and supportable information
that is relevant and available without additional cost or effort. This includes both quantitative and
qualitative information and analysis, based on the Group’s historical experience and informed credit
assessment and including forward‑looking information.
The Company assumes that the credit risk of financial assets is significantly increased when early
warning indicators are activated in accordance with the Group's policy or the contractual terms of the
instruments.
The Group considers a financial asset to be in default when:
- the borrower is unlikely to pay its credit obligations to the Group in full, without
recourse by the Group to actions such as realising security (if any is held); or
- the financial asset is more than 365 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a
financial instrument.
12‑month ECLs are the portion of ECLs that result from default events that are possible within the 12
months after the reporting date (or a shorter period if the expected life of the instrument is less than
12 months). The maximum period considered when estimating ECLs is the maximum contractual
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NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
64
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.9 Financial instruments (continued)
2.9.5 Impairment of non-derivative financial assets (continued)
Measurement of ECLs
ECLs are a probability‑weighted estimate of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance
with the contract and the cash flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
Credit impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt
securities at FVOCI are credit‑impaired. A financial asset is ‘credit‑impaired’ when one or more events
that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit‑impaired includes the following observable data:
- significant financial difficulty of the borrower or issuer;
- a breach of contract such as significant days past due;
- it is probable that the borrower will enter bankruptcy or other financial reorganisation;
or
- the disappearance of an active market for a security because of financial difficulties.
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying
amount of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and
is recognised in OCI.
Write-off of financial assets
The gross carrying amount of a financial asset is written off when the Group has no reasonable
expectations of recovering a financial asset in its entirety or a portion thereof. For smaller individual
customers, the Group has a policy of writing off the gross carrying amount when the financial asset is
365 days past due based on historical experience of recoveries of similar assets. For larger corporate
customers, the Group individually makes an assessment with respect to the timing and amount of
write‑off based on whether there is a reasonable expectation of recovery. The Group generally expects
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NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
65
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.10 Leases
The Group and Company are Lessee
At inception of a contract, the Group and Company assess whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset
for a period of time in exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group and Company use the definition of a lease in IFRS 16.
At commencement or on modification of a contract that contains a lease component, the Group and
Company allocate the consideration in the contract to each lease component on the basis of its relative
stand-alone prices. However, for the leases of property the Group and Company have elected not to
separate non-lease components and account for the lease and non-lease components as a single lease
component.
The Group and Company recognise a right-of-use asset and a lease liability at the lease commencement
date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore
the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term, unless the lease transfers ownership of the underlying
asset to the Group and Company by the end of the lease term or the cost of the right-of-use asset reflects
that the Group and Company will exercise a purchase option. In that case the right-of-use asset will be
depreciated over the useful life of the underlying asset, which is determined on the same basis as those
of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group’s and Company’s incremental borrowing rate. Generally, the Group and
Company use its incremental borrowing rate as the discount rate.
The Group and Company determine its incremental borrowing rate by obtaining interest rates from
various external financing sources and makes certain adjustments to reflect the terms of the lease and
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NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
66
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.10 Lease (continued)
Lease payments included in the measurement of the lease liability comprise the following:
- fixed payments, including in-substance fixed payments;
- variable lease payments that depend on an index or a rate, initially measured using the index or
rate as at the commencement date;
- amounts expected to be payable under a residual value guarantee; and
- the exercise price under a purchase option that the Group and Company are reasonably certain
to exercise, lease payments in an optional renewal period if the Group and Company are
reasonably certain to exercise an extension option, and penalties for early termination of a lease
unless the Group and Company are reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is a
change in the Group’s and Company’s estimate of the amount expected to be payable under a residual
value guarantee, if the Group and Company change its assessment of whether it will exercise a purchase,
extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use
asset has been reduced to zero.
The Group and Company present right-of-use assets that do not meet the definition of investment
property in ‘property, plant and equipment’ and lease liabilities in ‘loans and borrowings’ in the
statement of financial position.
Short-term leases and leases of low-value assets
The Group and Company have elected not to recognise right-of-use assets and lease liabilities for leases
of low-value assets and short-term leases, including IT equipment. The Group and Company recognise
the lease payments associated with these leases as an expense on a straight-line basis over the lease
term.
In the comparative period leases of property and equipment, where the Group and Company had
substantially all the risks and rewards of ownership, were classified as finance leases. Finance leases were
capitalized at the inception of the lease at the lower of fair value of the leased property or the present
value of minimum lease payments. Each lease payment was allocated between the liability and finance
charges so as to achieve a constant rate on the balance outstanding. The interest element of the finance
costs was charged to the income statement over the lease period. The property and equipment acquired
under finance leases were depreciated over the shorter of the useful life of the asset and the lease term.
Leases where the significant portion of risks and rewards of ownership were not retained by the Group
and Company were classified as operating leases. Payments made under operating leases were charged
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
67
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.10 Lease (continued)
The Group and Company are Lessor
The accounting policy applicable to the Group and Company as a lessor in comparative information is not
different from the policy in accordance with the new standard. When concluding a contract, the Group
and Company determine whether it is a financial or operating or operating lease, depending on whether
the lease agreement transfers almost all risks and rewards associated with the ownership of the property.
All leases where the Group and Company are lessors are operating leases.
Assets under an operating lease where the Group and the Company are the lessor are depreciated over
their expected useful lives on a basis consistent with similar owned assets. Rental income is recognised
on a straight-line basis over the lease term, even if the proceeds are not balanced, unless there is an
alternative basis representing the time frame in which the benefits of the lease and the depreciation of
2.11 Inventories
Inventories of raw materials and spare parts are stated at the lower of cost, determined using the
weighted average method, or net realisable value. Net realisable value is the estimated selling price in
the ordinary course of business, less applicable variable selling expenses.
The cost of work-in-process and finished goods comprise raw materials, direct labour, other direct
costs and related production overheads (based on normal operating capacity).
2.12 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, deposits held at call with banks and other short-
2.13 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Where the Company purchases its equity share capital (treasury shares), the consideration paid,
including any directly attributable incremental costs (net of income taxes) is deducted from equity
attributable to the Company’s equity holders until the shares are withdrawn or reissued. Where such
shares are subsequently reissued, any consideration received, net of any directly attributable
incremental transaction costs and the related income tax effects, is included in equity attributable to
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NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
68
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.14 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs)
and the redemption value is recognised in the income statement over the period of the borrowings
using the effective interest method. Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset form part of the cost of that asset. Other borrowing
costs are recognised as an expense in the income statement. Loans that will be repaid solely by sale of
assets under foreclosure are valued in accordance with the estimated value of assets under
foreclosure.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan if it is
probable that some or all of the facility will be drawn down.
Borrowings are classified as current liabilities unless the Group or the Company have an unconditional
2.15 Income tax
The tax expense for the year comprises current and deferred tax. Tax is recognised in the income
statement, except to the extent that it relates to items recognised in other comprehensive income or
directly in equity. In this case the tax is also recognised in other comprehensive income or directly in
equity, respectively.
The current tax charge is calculated on the basis of the tax laws enacted or partially enacted at the
balance sheet date in the countries where the Company and its subsidiaries operate and generate
taxable income. The tax base represents the difference between income and expenses, as determined
by the applicable law. Management of the Group periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulations are subject to interpretation and consider
establishing provisions where appropriate on the basis of amounts expected to be paid to the tax
2.16 Deferred income tax
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
However, deferred income tax is not accounted for if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and
laws) that have been enacted or partially enacted by the balance sheet date and are expected to apply
when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
69
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.16 Deferred income tax (continued)
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and
associates, except where the timing of the reversal of the temporary difference is controlled by the
Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is legally enforceable right to offset
current tax assets against current tax liabilities and when deferred income taxes assets and liabilities
relate to income taxes imposed by the same taxation authority on either the same taxable entity or
2.17 Trade and other payables
Trade and other payables are recognised initially at fair value and subsequently measured at amortised
2.18 Employee benefits
(a) Pension obligations and post-employment benefits
In the normal course of business through salary deductions, the Group and the Company make
payments to mandatory pension funds on behalf of its employees as required by law. All contributions
made to the mandatory pension funds are recorded as salary expense when incurred.
Furthermore, according to the Collective labour agreement, the Group and the Company have an
obligation to make severance payments to employees at the time of the employees’ retirement. The
liability recognised in the balance sheet is the present value of defined benefit obligation at the balance
sheet date less past service costs with adjustments for unrecognised actuarial gains or losses. The
defined benefit obligation is calculated annually by independent actuaries using the projected unit
credit method. The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows using interest rates of governmental bonds that are denominated in
the currency in which the benefits will be paid and that have terms to maturity approximating to the
terms of the related retirement severance payment.
(b) Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal
retirement date, or whenever an employee accepts voluntary redundancy in exchange for these
benefits. The Group recognises termination benefits when it is demonstrably committed to either
terminating the employment of current employees according to a detailed formal plan without
possibility of withdrawal, or providing termination benefits as a result of an offer made to encourage
voluntary redundancy. Benefits falling due more than 12 months after the balance sheet date are
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NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
70
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.18 Employee benefits (continued)
(c) Other long-term employee benefits
The Group recognises a liability for long-term employee benefits (jubilee awards) evenly over the
period the benefit is earned based on actual years of service. The long-term employee benefit liability
is determined using assumptions regarding the likely number of staff to whom the benefit will be
2.19 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of
past events; it is more likely than not that an outflow of resources will be required to settle the
obligation; and the amount has been reliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised
even if the likelihood of an outflow with respect to any item included in the same class of obligations
is small.
Provisions are measured at the present value of the expenditures expected to be required to settle the
obligation using a discount rate that reflects current market assessments of the future value of money
and the risks specific to the obligation. The increase in the provision due to passage of time is
2.20 Revenue recognition
Performance obligations and revenue recognition policies
Revenue is measured based on the consideration specified in a contract with a customer. The Company
recognizes revenue when it transfers control over a good or service to a customer. The transfer of
control of a good or service may take place continuously (revenue recognition on a progress towards
completion basis) or on a specific date (recognition on completion). Before revenue is recognised, the
Company identifies both the contract and the various performance obligations contained in the
contract. The number of performance obligations depends on the type of contract and activities. Most
of the Company’s contracts involve only one performance obligation. Revenue recognition policies
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
71
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.20 Revenue recognition (continued)
(a) Revenue from construction contracts
Revenues from construction contract is determined on the basis of the last relevant estimate of the
total selling price in the construction contract. The Group and the Company recognize revenue from
the construction contract at the end of each period using the method of assessing the "degree of
performance" of the performance obligation.
The Group and the Company estimate the ‘progress to satisfaction’ of the performance obligation to
determine the appropriate amount of revenue and costs to recognize in each period. The ‘progress to
satisfaction’ is calculated using the ‘cost-to-cost’ input method which measures the proportion of
contracts costs incurred up to the reporting date compared to total estimated contract costs for each
contract. Costs incurred in the year in connection with future activity on a contract are excluded from
contract costs in determining the ‘progress to satisfaction’ and are presented as inventories,
prepayments or other assets, depending on their nature.
The Group and the Company present as an asset the gross amount due from customers for contract
work for all contracts in progress for which costs incurred plus recognized profits (less recognized
losses) exceed progress billings. Progress billings not yet paid by customers and retentions are included
within ‘trade and other receivables.
The Group presents as a liability the gross amount due to customers for contract work for all contracts
in progress for which progress billings exceed costs incurred plus recognized profits (less recognized
losses).
As soon as the loss under the construction contract is determined and it can be reliably measured, the
Company and the Group create a reservation for the expected losses until the end of the contract. The
loss under the construction contract is reserved in full, regardless of the degree of completion.
(b) Sales of goods
Revenues from sales of products are recognized when Group and Company delivers goods to the
buyer, when buyer accept delivered services or goods and when payments of the receivables is fairly
secure. Revenues are recognised at fair value of received funds or receivables, deducted from tax,
refunds and approvals, trade discounts and rebates.
(c) Interest income
Interest income is recognised on a time-proportion basis using the effective interest method. When a
receivable is impaired, the Group and the Company reduce the carrying amount to its recoverable
amount, being the estimated future cash flow discounted at original effective interest rate of the
instrument, and continues unwinding the discount as interest income. Interest income on impaired
loans is recognised using the original effective interest rate.
(d) Dividend income
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NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
72
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.21 Dividend distributions
Dividend distributions to the Company’s shareholders are recognised as a liability in the financial
statements in the period in which the dividends are approved by the General Assembly of the
2.22 Earnings per share
Earnings per share is determined by dividing the profit or loss attributable to equity holders of the
Company by the weighted average number of participating shares outstanding during the reporting
2.23 Value added tax
The Tax Authorities require the settlement of VAT on a net basis. VAT related to sales and purchases
is recognised and disclosed in the balance sheet on a net basis. Where a provision has been made for
impairment of receivables, impairment loss is recorded for the gross amount of the debtor, including
2.24 Mezzanine debt
Mezzanine debt is initially recognized as financial liability recognized at fair value (host contract).
Within the host contract, according to IAS 39 the Company has identified embedded derivatives
options, for (a) option for holder of the mezzanine instrument to require issuance of additional senior
debt for no additional proceeds should the Company achieve certain pre-defined debt-to-EBITDA (D/E)
ratios in 7
th
year and (b) option for early repayment of the mezzanine debt after 7
th
year for a maximum
amount up to HRK 35.5 million. Option (b) is treated as derivative at fair value and is offset with total
mezzanine debt, according to IAS 32, which defines net representation of financial liabilities
considering that Company intends to settle net amount of the commitment.
Managements estimates in assessing the mezzanine debt were as follow:
i. pre-defined debt-to-EBITDA ratio (2.5) in 7th year will not be achieved. The management
estimates that EBITDA will not be on the level that would result that D/E ratio is below the 2.5.
ii. the management plans to use early repayment option after 7
th
year and the Company will
repay remaining outstanding mezzanine debt amounting HRK 176.4 million (note 34) with a
maximum amount of HRK 35.5 million.
Part of mezzanine debt for which there is an obligation to pay proceeds from the sale of the investment
identified in the creditor agreement (to a maximum of HRK 62 million) was accounted for as a financial
liability initially recognised at fair value until the end of 2019 and was classified as other financial
liabilities and subsequently was measured at amortised cost using the effective interest method, taking
into consideration changes in future expected cash flows in accordance with IAS 39.
As at 31 December 2019, the part of the mezzanine debt for which there was an liability to pay with
funds collected from the sale of Dalekovod Professio d.d. it no longer exists as such. During 2019, the
Company was sold and this obligation was settled by its sale with the funds realized by the sale
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
73
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued)
2.25 Assets held for sale
Non-current assets are classified as held for sale if their carrying value will be largely compensated
through sale rather than through its continuing use; if these assets are available for immediate sale in
their existing state under conditions which are frequent and common for sale of such assets, and if the
sale is probable.
Assets held for sale are stated at the lower of net book value and fair value less cost to sell. Loss on
impairment from reduction to fair value less cost to sell, is charged to profit or loss.
Investments in associates and joint ventures that meet the criteria for classification as assets held for
sale at a certain time ceased to be measured using the equity method and are measured at lower of
NOTE 3 – CHANGES IN ACCOUNTING POLICIES
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
74
NOTE 4 – FINANCIAL RISK MANAGEMENT
4.1 Financial risk factors
The Company’s and the Group’s activities expose them to a variety of financial risks: market risk
(including currency risk and cash flow interest rate risk), price risk, credit risk and liquidity risk. The
Group and the Company do not have a written risk management programme, but overall risk
management in respect of these risks is carried out by the Company’s finance department.
(a) Market risk
(i) Currency risk
Most of the foreign sales revenue is denominated in EUROs. Domestic sales revenue is denominated
in HRK. The majority of long-term and short-term loans were agreed with a currency clause, i.e. they
are linked to the EURO. Along EUR, the Company is exposed to the movement in exchange rates
between NOK and UAH. Although any movement in exchange rates between the EURO against the
Croatian Kuna will have an impact on the Group’s and the Company’s operating results, the Company
does not use financial instruments to protect against currency risk.
At 31 December 2022, if the EURO had weakened/strengthened by 1.00% against the HRK (2021:
1.00%), with all other variables held constant, the net profit for the reporting period after tax would
have been HRK 171 thousand for the Group and HRK (215) thousand for the Company (2021: HRK 1,584
thousand for the Group and HRK 1,888 thousand for the Company)lower/(higher), mainly as a result
of foreign exchange gains/(losses) on translation of EURO-denominated trade receivables, trade
payables, borrowings and foreign cash funds.
According to the Management Board estimation, the impact of changes in other currencies does not
have significant effect on the financial statements of the Group and the Company.
(ii) Price risk
The Group is exposed to equity securities fair value and price risk because of investments held by the
Group classified on the consolidated balance sheet either as available for sale or at fair value through
profit or loss. Equity investments classified as available for sale are not listed, while those classified as
fair value through profit or loss are publicly traded but do not have a significant effect on the financial
position. To manage its fair value and price risk arising from investments in equity securities, the Group
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
75
NOTE 4 – FINANCIAL RISK MANAGEMENT (continued)
4.1 Financial risk factors (continued)
(iii) Cash flow interest rate risk
The Group has no significant interest-bearing assets, therefore the Group’s income and operating cash
flows are not substantially dependent of changes in market interest rates.
The Group’s and the Company’s interest rate risk arises from long-term borrowings and bonds.
Borrowings issued at variable rates expose the Group and the Company to cash flow interest rate risk.
The Group and the Company analyse their interest rate changes on a regular basis. Various scenarios
are simulated taking into consideration refinancing, renewal of existing positions and alternative
financing. Based on these scenarios, the Group and the Company calculate the impact on profit and
loss of a defined interest rate shift. As at 31 December 2022, if the effective interest rate on borrowings
with variable rates had increased/decreased by 0.82% on an annual level (2021: 0.82%), the loss after
tax would have been higher/lower by HRK 258 thousand (2021: HRK 357 thousand) as a result of a
higher/lower interest expense.
(b) Credit risk
The Group’s and the Company’s assets which potentially subject them to concentrations of credit risk
primarily include cash, trade and other receivables. The Group and the Company has policies in place
to ensure that sales of products are made to customers with an appropriate credit history, within
previously defined credit limits. A favourable structure of buyers (major buyers are mainly state-owned
companies) and the fact that, if necessary, collection from buyers is regulated by bank payment
guarantees, bills of exchange, letters of credit and other types of security, almost completely
diminishes the risk arising from the collection of trade receivables. A detailed analysis and maximum
exposure to credit risk are shown in notes 28 and 26. Further, judgements and estimates in respect of
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding
through an adequate amount of committed credit facilities and the ability to meet all obligations. The
Group aims to maintain flexibility in funding by keeping committed credit lines available.
With the legal validity of the pre-bankruptcy settlement on 14 February 2014 conditions for
enforcement of financial restructuring were met which had significant affect over the Company’s debt
and their maturity. Part of trade payables is converted into share capital (note 30), part is converted
into mezzanine debt (note 6) and part is reclassified into long-term liabilities in accordance with the
adopted plan. Borrowings are also partly converted into mezzanine debt, and partly reprogrammed.
The maturity of borrowings is presented in note 31.
The obligations under the pre-bankruptcy settlement were settled in 2022, and the pre-bankruptcy
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
76
NOTE 4 – FINANCIAL RISK MANAGEMENT (continued)
4.2 Capital risk management
The Company's and Group's objectives when managing capital are to safeguard the Company's ability
to continue as a going concern in order to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company and the Group may adjust the amount
of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to
reduce debt.
The Company and the Group monitor capital on the basis of the gearing ratio. This ratio is calculated
as net debt divided by total capital. Net debt is calculated as total borrowings (including long-term and
short-term borrowings, as shown in the balance sheet) less cash and cash equivalents and short-term
deposits given. Total capital is calculated as equity, as shown in the balance sheet, plus net debt.
The Company's gearing ratio was as follows:
The Group's gearing ratio was as follows:
(in thousands of HRK)
31 December
2022.
31 December
2021.
Borrowings (note 31)
72,776
365,502
Cash and cash equivalents (note 29)
(21,377)
(50,727)
Net debt
51,399
314,775
Equity
452,361
443,543
Total equity and net debt
503,760
758,318
Gearing ratio - Company
10.2%
41.5%
(in thousands of HRK)
31 December
2022.
31 December
2021.
Borrowings (note 31)
62,425
354,891
Cash and cash equivalents (note 29)
(28,509)
(57,842)
Net debt
33,916
297,049
Equity
495,335
483,007
Total equity and net debt
529,251
780,056
Gearing ratio - Group
6.4%
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
77
NOTE 4 – FINANCIAL RISK MANAGEMENT (continued)
4.3 Fair value estimation
The Group discloses fair value measurements by level of the following fair value measurement
hierarchy:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
- Inputs other than quoted prices included within level 1 that are observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
- Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs) (level 3).
The fair value of financial instruments traded on active markets is based on quoted market prices on
the reporting day. The market is considered active if the quoted prices are known on the basis of the
stock exchange, the activities of a broker, industry group or regulatory agency, and these prices
represent actual and regular market transactions under normal trading conditions.
The fair value of financial instruments not traded on the active market (for example: OTC derivatives)
is determined using valuation techniques. These assessment techniques require the maximum use of
visible market data where possible and rely as little as possible on entity-specific estimates. If all
significant inputs required for a fair valuation of the instrument are visible, the instrument shall be
included in level 2. Where one or more significant inputs are not based on visible market data, the
instrument shall be included in level 3.
The table below presents the Group’s assets at fair value:
There were no transfers between level 1 and level 2 during 2021 and 2020.
(in thousands of HRK)
Level 1
Level 2
Level 3
Total
Group
31 December 2022.
Property, plant and equipment
Land
-
-
66,414
66,414
Total
-
-
66,414
66,414
31 December 2021.
Property, plant and equipment
Land
-
-
112,312
112,312
Total
-
-
112,312
112,312
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
78
NOTE 4 – FINANCIAL RISK MANAGEMENT (continued)
4.3 Fair value estimation (continued)
The table below presents the Company’s assets at fair value:
There were no transfers between level 1 and level 2 during 2021 and 2020.
(in thousands of HRK)
Level 1
Level 2
Level 3
Total
Company
31 December 2022.
Property, plant and equipment
Land
-
-
66,414
66,414
Total
-
-
66,414
66,414
31 December 2021.
Property, plant and equipment
Land
-
-
112,313
112,313
Total
-
-
112,313
112,313
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
79
NOTE 4 – FINANCIAL RISK MANAGEMENT (continued)
4.3 Fair value estimation (continued)
The tables below present the fair value liabilities of the Group and Company:
(in thousands of HRK)
Level 1
Level 2
Level 3
Total
Group
31 December 2022.
Liabilities secured with foreclosure assets
-
-
-
-
Mezzanine debt
-
-
-
-
Trade payables
-
-
-
-
Total
-
-
-
-
31 December 2021.
Liabilities secured with foreclosure assets
-
-
67,492
67,492
Mezzanine debt
-
-
31,711
31,711
Trade payables
-
-
3,665
3,665
Total
-
-
102,868
102,868
(in thousands of HRK)
Level 1
Level 2
Level 3
Total
Company
31 December 2022.
Liabilities secured with foreclosure assets
-
-
-
-
Mezzanine debt
-
-
-
-
Trade payables
-
-
-
-
Total
-
-
-
-
31 December 2021.
Liabilities secured with foreclosure assets
-
-
67,492
67,492
Mezzanine debt
-
-
36,303
36,303
Trade payables
-
-
3,665
3,665
Total
-
-
107,460
107,460
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
80
NOTE 5 – CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The Group makes estimates and assumptions concerning the future. The resulting accounting
estimates will, by definition, rarely equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are outlined below.
(a) Revenue recognition
The Group estimates the ‘progress to satisfaction’ of the performance obligation to determine the
appropriate amount of revenue to recognise in each period. The ‘progress to satisfaction’ is calculated
using the ‘cost-to-cost’ input method which measures the proportion of contracts costs incurred up to
the reporting date compared to total estimated contract costs for each contract (note 8).
(b) Impairment of loans and receivables
The Group and the Company review the portfolio of loans and receivables on an annual basis to assess
impairment. While assessing the recognition of impairment in the statement of comprehensive
income, the Group and the Company assess whether there is observable data indicating the existence
of a measurable decrease in future cash flows of the portfolio of loans and receivables before
establishing the impairment of certain loans and receivables in the stated portfolio (note 12).
(c) Useful life of property, plant and equipment
The Company’s and the Group companies’ managements determine and reassess the useful lives and
related depreciation charge for tangible assets. This assessment is based on the estimated remaining
useful life of assets and could significantly change as a result of technical innovation and activities of
competitors. Management will increase the depreciation charge if it assesses that the useful life of
assets is lower than prior to estimates, or it will write off obsolete and discarded property (note 2.5.1).
(d) Legal claims and disputes
Provisions for legal claims and disputes are recorded based on Management's best estimate of
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
81
NOTE 6 – PRE-BANKRUPTCY SETTLEMENT
The pre-bankruptcy settlement process, initiated by the Company on 20 December 2012, was formally
completed on 14 February 2014 with the issuance of a final settlement decision.
As part of the pre-bankruptcy settlement, the Company prepared and implemented a restructuring
plan that included financial and operational measures to relieve the Company and improve profitability
and EBITDA in order to achieve long-term sustainable business, and which plan was accepted by
creditors with over 90% of votes. The emphasis of the restructuring was on providing liquidity through
the sale of "non-core" assets and restructuring and reducing debt in order to create conditions for
recapitalization and achieve financial stability.
Following the recapitalization of the Company during the year and the payment of the total amount
of recapitalization of HRK 410 million in January 2022, on 11 February 2022 with funds raised by the
issue of new shares, the Company settled its debts to creditors whose claims were determined by a
pre-bankruptcy settlement concluded between the Company and his creditors before the
Commercial Court in Zagreb on January 29, 2014 under business number Stpn-365/2013 on the basis
of the remaining senior debt and mezzanine debt or are related to them or as prescribed by the
adopted decision under Ad. 13. at the General Assembly of the Society on June 30, 2021.
By the decision of the Commercial Court in Zagreb from July 8, 2022, the pre-bankruptcy settlement
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
82
NOTE 7 – GOING CONCERN
The recapitalization of Dalekovod d.d. was successfully completed by entering the share capital increase
in the court register in January 2022. Pursuant to the Shareholders' Decision on the increase of the
Company's share capital, HRK 410 million was paid, ie 41,000,000 new ordinary shares were subscribed
with an individual nominal amount of HRK 10.00 and the Company's share capital was increased to HRK
412,471,930.00.
Although the circumstances related to the COVID-19 pandemic and the war in Ukraine adversely affected
the activity of investors and key customers of the Group in previous years, during 2022 there was an
increase in tender activity compared to the same disease of the previous year, and there is also a
significant improvement in the financial position as a result of the recapitalization and the gradual
normalization of market trends.
The management concludes that the assumption of unlimited business time used in the preparation of
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
83
NOTE 8 – BUSINESS SEGMENT INFORMATION
The Group separately monitors and presents business results of basic business segments, Production
and Construction, whose operating activities are interrelated for the purpose of realising profit for the
Group.
1. The Production segment includes forging works, the casting plant and the laboratory for
quality control and the production and sales of metal frames/structures, as well as the
manufacture and sales of suspension and jointing equipment.
2. The Construction segment includes the services of construction and project documentation
preparation of power and distribution facilities, transformer stations, laying submarine and
subterranean energy and telecommunication cables, posting public lighting, installing
antenna, television and telecommunication posts as well as work relating to the construction
of motorways.
Management monitors the operating results of the business segments to make decisions on the
allocation of resources and performance assessment. Segment performance assessment is based on
the gross segment revenue and realised profit from regular operations, as explained in the following
table. The Group manages finance income and costs, share of profit of joint ventures and income tax
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
84
NOTE 8 – BUSINESS SEGMENT INFORMATION (continued)
Operating results by business segments for the Group
(in thousands of HRK)
Construction
Production
Other
Discontinued
operations
Total
Year ended 31 December
2022.
Gross revenues
939,662
186,244
8
-
1,125,914
Inter-segment revenues /i/
(9,371)
(86,993)
-
-
(96,364)
Total revenues
930,291
99,251
8
-
1,029,550
Operating profit/(loss)
before depreciation and
amortisation
42,863
3,863
10
(768)
45,968
Depreciation and
amortisation
(28,818)
(1,164)
-
-
(29,982)
Operating profit/(loss)
14,045
2,699
10
(768)
15,986
Total assets
823,345
152,974
345
122
976,786
Total liabilities
348,993
129,331
2,229
898
481,451
Year ended 31 December
2021.
Gross revenues
1,422,789
143,113
6
-
1,565,908
Inter-segment revenues /i/
(130,437)
(71,147)
-
-
(201,584)
Total revenues
1,292,352
71,966
6
-
1,364,324
Operating profit/(loss)
before depreciation and
amortisation
74,927
1,940
1
(1,262)
75,605
Depreciation and
amortisation
(28,093)
(3,637)
-
-
(31,730)
Operating loss
46,834
(1,697)
1
(1,262)
43,875
Total assets
1,186,364
132,182
384
285
1,319,215
Total liabilities
740,459
92,920
2,277
552
836,208
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
85
NOTE 8 – BUSINESS SEGMENT INFORMATION (continued)
/i/ Sales are allocated based on the country in which the customer is located.
In 2022, the Group achieved 14% with the largest customer, and the Company 20% of total sales
revenue. With the next largest customer, the Group generated 13% in 2022, and the Company 19% of
total sales revenues.
In 2021, the Group achieved 24% with the largest customer, and the Company 34% of total sales
revenue. With the next largest customer, the Group generated 9% in 2021, and the Company 13% of
total sales revenues.
/ii/ Sales revenues by sectors are as follows:
Revenue from construction contracts amounts to HRK 893,697 thousand for the Group (2021: HRK
1,261,488 thousand) and 710,486 thousand for the Company (2021: HRK 996,581 thousand)
2022.
2021.
(in thousands of
HRK)
%
(in thousands of
HRK)
%
Croatia
289,577
28.13
270,111
19.80
Sweeden
269,499
26.18
129,362
9.48
Norway
151,661
14.73
351,296
25.75
Slovenia
117,877
11.45
357,546
26.21
Bosnia and Herzegovina
69,954
6.79
57,025
4.18
Ukraine
49,699
4.83
122,770
9.00
Macedonia
13,452
1.30
13,285
0.97
Germany
10,268
1.00
2,521
0.18
United Kingdom
3,865
0.38
9,260
0.68
France
55
0.01
21,029
1.54
Other abroad
53,643
5.20
30,119
2.21
Total
1,029,550
100.00
1,364,324
100.00
2022.
2021.
(in thousands of HRK)
Energetics
801,286
1,196,075
Railroads
42,107
52,200
Sale of metal constructions
34,703
18,906
Sale of suspension and jointing equipment
64,538
53,044
Roads
41,306
4,638
Projects
36,594
30,864
Properties
3,653
8,162
Other
5,363
435
Total
1,029,550
1,364,324
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
86
NOTE 8 – BUSINESS SEGMENT INFORMATION (continued)
In the following table, information on receivables and liabilities towards customers based on the
construction contract was disclosed, for which, at the reporting date, the Company and the Group
reported customer receivables by contractual obligation or liability to customers by contractual
Contract assets primarily relate to the Company's and Group’s right to compensation for the works
executed but not charged on the reporting date. Contract assets are transferred to receivables when
they become unconditional. That usually happens when the Company and Group issues an invoice to
the customer.
Contract liabilities relate to deferred income for construction works, for which revenues are recognized
over time and to customer advances received.
Advances received for projects under construction that are active at the reporting date are presented
within advances in note 35 and amount to HRK 63,875 thousand (2021: HRK 81,993 thousand) for
NOTE 9 – OTHER INCOME
Rental income of the Company is related to investment property (note 20).
The most significant part of other income refers to income from providing professional assistance to
Dalekovod Grupa
Dalekovod d.d.
(u tisućama kuna)
2022.
2021.
2022.
2021.
Trade receivables
278,484
164,382
266,782
131,913
Guarantee deposits - retention
68,548
94,945
68,530
94,915
Contract assets
130,813
85,249
111,163
70,375
Contract liabilities
(112,492)
(125,458)
(105,405)
(115,117)
365,353
219,118
341,070
182,086
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Income from reversal of provisions
6,057
7,638
3,809
7,282
Insurance claims proceeds
426
2,571
373
2,496
Rental income
762
485
30,105
22,887
Court settlement income
-
81
-
81
Inventory surpluses
54
15
1
8
Fair valuation of libilities to secured creditors
8,806
-
7,531
-
Other operating income
4,614
8,647
5,970
10,103
20,719
19,437
47,789
42,857
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
87
NOTE 10 – COST OF MATERIALS AND SERVICES
NOTE 11 – STAFF COSTS
Other staff costs include gifts, jubilee awards and other benefits.
As of 31 December 2022, the Group had 1,088 employees (2021: 1,193 employees), and the Company
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Raw materials and supplies
Raw materials and supplies
193,513
145,226
196,908
125,676
Energy
24,580
16,177
16,850
12,432
Spare parts and small inventory
8,582
12,291
7,145
10,759
226,675
173,694
220,903
148,867
External services
Subcontractor services
209,344
369,151
114,958
177,758
Rental expense
25,731
32,768
38,650
38,299
Transportation
17,724
19,030
10,916
14,737
Repairs and maintenance
16,053
17,126
12,569
14,115
Advertising and promotion
1,265
548
804
525
Other
7,080
8,404
2,716
2,249
277,197
447,027
180,613
247,683
Total cost of materials and services
503,872
620,721
401,516
396,550
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Net salaries
182,811
222,949
143,338
184,643
Taxes and contributions on and from salaries
65,843
67,436
43,464
45,018
Severance costs
3,315
848
3,186
523
Other staff costs
33,726
34,184
16,497
19,647
285,695
325,417
206,485
249,831
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
88
NOTE 12 – OTHER OPERATING EXPENSES
The cost of per diems and travel expenses in 2022 includes the cost of accommodation and meals.
The costs of intellectual and non-production services at the Group level include fees to the auditors.
The fees relate to the audit services and the permitted non-audit consulting services. Total fees for
audit services and the permitted non-audit consulting services amounts to HRK 500 thousand ( 2021:
HRK 507 thousand)
Also included are non-production services, at the Group level HRK 8,886 thousand, and at the Company
level HRK 4,462 thousand, which are largely various services of testing, testing, commissioning, etc. on
projects.
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Intellectual and non-production services
33,601
35,064
15,050
22,064
Daily allowances and travel cost
26,432
47,004
24,591
46,147
Insurance
8,314
10,673
6,753
9,581
Bank charges
8,954
9,194
7,873
8,505
Taxes and contributions
4,571
4,251
3,343
3,221
Entertainment
2,302
1,479
1,206
750
Court cases
1,761
4,055
1,545
3,646
Sponsorships, donations and other aids
578
537
254
256
Interest from suppliers
408
454
92
162
Impairment of inventories (restated)
309
-
-
-
Fines and penalties
272
328
52
82
Impairment of trade receivables and loans – net
207
3,972
(478)
5,111
Inventory shortages
41
69
13
12
Impairment of non-financial assets
10
-
-
-
Court settlement agency cost
-
237
-
237
Impairment and write-off of property, plant and
equipment
-
(999)
-
(999)
Other
9,257
5,745
7,230
7,224
97,017
122,063
67,524
105,999
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
89
NOTE 14 – FINANCE INCOME AND COSTS– NET
The value of Dalekovod Adria d.o.o. it was estimated at HRK 2,000 thousand based on available market
data, and profit from the change in the fair value of shares that were adjusted to a lower value in earlier
periods was recognized.
As part of other financial income, income from the sale of shares in the company Officium partner d.o.o.
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Net gain on sale of property, plant and equipment
-
160
-
37
-
160
-
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Net foreign exchange differences from financing
activities
6,349
10,063
5,862
9,812
Interest income
20
311
616
527
Income from unwinding of discount
923
867
923
867
Interest income on bank deposits
120
36
-
3
Income from shares in profit
-
-
2,113
4,900
Income from interest and fees write-offs
-
-
2,000
-
Other finance income
90
-
90
-
Finance income
7,502
11,277
11,605
16,109
Net foreign exchange differences (financing activities)
(5,735)
(11,534)
(5,211)
(11,155)
Interest expense
(4,726)
(18,169)
(5,208)
(18,551)
Cost of writing off interest and fees
(102)
(945)
(102)
(945)
Other financial expenses
(573)
-
-
-
Finance costs
(11,136)
(30,648)
(10,521)
(30,651)
(3,634)
(19,371)
1,084
(14,542)
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
90
NOTE 15 – INCOME TAX
The reconciliation of accounting income and taxable income is detailed in the table below:
In accordance with the regulations of the Republic of Croatia, the Tax Authority may at any time inspect
the Company's books and records within 3 years following the year in which the tax liability is reported,
and may impose additional tax assessments and penalties. The same regulations apply to other
subsidiaries of the Group in Croatia. Foreign subsidiaries abroad must comply with tax regulations of
the country in which they operate. During the year there were no changes in tax rates in countries
where members of the Group operate. Reported income tax expense in the Company includes income
tax expense recorded in separate business units abroad in accordance with the tax laws of the
countries in which the units operate.
Overview of tax losses for which deferred tax asset has not been recognised is as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Profit/(loss) before tax
11,584
24,325
6,748
18,352
Tax calculated at the domestic tax rate
applicable to profits in the respective
countries
6,019
(1,522)
4,649
(2,562)
Effect of non-taxable income
(1,192)
(2,023)
(991)
(1,754)
Effect of non-deductible expenses
2,540
3,022
2,013
2,865
Effect of tax losses not recognised as
deferred tax
assets
-
8,797
-
8,369
Utilisation of tax losses for whic deferred tax
assets was not recognised
(1,045)
-
(545)
-
Other
(349)
-
(349)
-
Income tax expense
5,973
8,274
4,777
6,918
Effective tax rate
51.6%
34.0%
70.8%
37.7%
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Unutilised tax losses
Tax loss from 2017 - expires 2022
-
22,515
-
10,031
Tax loss from 2018 - expires 2023
100,168
100,168
73,429
73,429
Tax loss from 2019 - expires 2024
35,334
35,334
-
-
Tax loss from 2019 - expires 2025
59,076
59,076
44,108
44,108
Tax loss from 2020 - expires 2026
49,212
47,836
46,959
45,574
243,790
264,929
164,496
173,142
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
91
NOTE 15 – INCOME TAX (continued)
The Company and the Group did not recognise deferred tax asset due to the uncertainty of existence
of future taxable profits in relation to which the Company will be available to utilize the tax losses.
During the year the Company and the Group recognised deferred tax liability on revaluation of assets
under foreclosure (note 19).
Movement in deferred tax liability
NOTE 16 – BASIC AND DILUTED PROFIT / (LOSS) PER SHARE
Basic and diluted earnings per share are calculated based on the Company’s net profit attributable to
the Company shareholders and the weighted average number of ordinary shares in issue, excluding
NOTE 17 – DIVIDEND PER SHARE
In 2022, a write-off of liabilities for dividends in the amount of HRK 101 thousand was carried out,
which was shown as a liability for dividends under the item "liabilities to suppliers and other liabilities"
(note 33) and related to dividends for shareholders who did not deliver necessary data for payment
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
At beginning of year
9,485
8,936
9,485
8,936
Charged to revaluation reserves
1,503
549
1,503
549
Canceled
(395)
-
(395)
-
At end of year
10,593
9,485
10,593
9,485
Dalekovod Group
2022.
2021.
Net loss attributable to shareholders (in thous. of HRK)
5,611
16,051
Weighted average number of shares
30,996,205
12,433,353
Basic/diluted loss per share (in HRK)
0.18
1.29
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
92
NOTE 18 – INTANGIBLE ASSETS
Group
(in thousands of HRK)
Goodwill
Usage rights
Software
Assets
under
construction
Total
At 1 January 2021.
Cost
1,213
15,511
45,396
372
62,492
Accumulated amortisation and
impairment losses
-
(15,511)
(42,150)
-
(57,661)
Net book value
1,213
-
3,246
372
4,831
Year ended 31 December
2021.
At 1 January
1,213
-
3,246
372
4,831
Additions
-
-
17
20
37
Transfer
-
-
359
(359)
-
Amortisation
-
-
(1,342)
-
(1,342)
At 31 December
1,213
-
2,280
33
3,526
At 31 December 2021.
Cost
1,213
-
45,772
33
47,018
Accumulated amortisation and
impairment losses
-
-
(43,492)
-
(43,492)
Net book value
1,213
-
2,280
33
3,526
Year ended 31 December
2022.
At 1 January
1,213
-
2,280
33
3,526
Additions
-
-
16
4,530
4,546
Transfer
-
-
-
618
618
Amortisation
-
-
(1,284)
-
(1,284)
At 31 December
1,213
-
1,012
5,181
7,406
At 31 December 2022.
Cost
1,213
-
45,788
5,181
52,182
Accumulated amortisation and
impairment losses
-
-
(44,776)
-
(44,776)
Net book value
1,213
-
1,012
5,181
7,406
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
93
NOTE 18 – INTANGIBLE ASSETS (continued)
Group (continued)
Goodwill is allocated entirely to the Construction segment.
Goodwill is tested annually for impairment as stated in note 2.7.
The recoverable amount of cash generating units is determined based on value-in-use calculations.
These calculations use cash flow projections from financial budgets approved by the management
covering a five-year period. The terminal growth rate used to extrapolate the cash flows beyond the
five-year period is 3%, and the present value of future cash flows is calculated using a discount rate of
7.24%. The growth rate assumption was based on the historical data and the management’s
expectations for market development. The discount rate used is based on the Group's weighted
average cost of capital.
By the decision of the Management Board dated 31.01.2023. In 2008, salary costs in the amount of
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
94
NOTE 18 – INTANGIBLE ASSETS (continued)
Company
(in thousands of HRK)
Usage rights
Software
Assets under
construction
Total
At 1 January 2021.
Cost
15,511
42,622
-
58,133
Accumulated amortisation
(15,511)
(39,699)
-
(55,210)
Net book value
-
2,923
-
2,923
Year ended 31 December 2021.
At 1 January
-
2,923
-
2,923
Additions
-
16
-
16
Amortisation
-
(1,169)
-
(1,169)
At 31 December
-
1,770
-
1,770
At 31 December 2021.
Cost
-
42,638
-
42,638
Accumulated amortisation
-
(40,868)
-
(40,868)
Net book value
-
1,770
-
1,770
Year ended 31 December 2022.
At 1 January
-
1,770
-
1,770
Additions
-
-
4,530
4,530
Transfer
-
-
618
618
Amortisation
-
(1,124)
-
(1,124)
At 31 December
-
646
5,148
5,794
At 31 December 2022.
Cost
-
42,638
5,148
47,786
Accumulated amortisation
-
(41,992)
-
(41,992)
Net book value
-
646
5,148
5,794
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
95
NOTE 19 – PROPERTY, PLANT AND EQUIPMENT
Group
(in thousands of HRK)
Land
Buildings
Plant and
equipment
Assets under
construction
Total
At 1 January 2021.
Cost or deemed cost
92,504
291,674
431,755
1,168
817,101
Accumulated
depreciation
-
(224,294)
(338,049)
-
(562,343)
Net book value
92,504
67,380
93,706
1,168
254,758
-
Year ended 31
December 2021.
-
At 1 January
92,504
67,380
93,706
1,168
254,758
Additions
-
1,402
43,964
23
45,389
Transfer
-
-
374
(374)
-
Disposals and write-
offs
-
(39)
(463)
-
(502)
Revaluation
3,050
-
-
-
3,050
Foreign exchange
differences
(4)
(4)
(2)
-
(10)
Depreciation
-
(6,064)
(24,324)
-
(30,388)
At 31 December
95,550
62,675
113,255
817
272,297
-
At 31 December
2021.
-
Cost or deemed cost
95,550
293,033
379,161
817
768,561
Accumulated
depreciation and
impairment losses
-
(230,358)
(265,906)
-
(496,264)
Net book value
95,550
62,675
113,255
817
272,297
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
96
NOTE 19 – PROPERTY, PLANT AND EQUIPMENT (continued)
Group
(in thousands
of HRK)
Year ended 31 December
2022.
Land
Buildings
Plant and
equipment
Assets
under
construction
Total
At 1 January
95,550
62,675
113,255
817
272,297
Additions
-
92
16,147
18
16,257
Disposals and write-offs
(25,279)
(36)
(3,079)
-
(28,394)
Revaluation
8,350
-
-
-
8,350
Foreign exchange
differences
4
-
-
-
4
Depreciation
-
(5,808)
(22,890)
-
(28,698)
At 31 December
78,625
56,923
103,433
835
239,816
At 31 December 2022.
Cost or deemed cost
78,625
293,089
392,229
835
764,778
Accumulated depreciation
and impairment losses
-
(236,166)
(288,796)
-
(524,962)
Net book value
78,625
56,923
103,433
835
239,816
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
97
NOTE 19 – PROPERTY, PLANT AND EQUIPMENT (continued)
Company
(in thousands of HRK)
Land
Buildings
Plant and
equipment
Assets under
construction
Total
At 1 January 2021.
Cost or deemed cost
56,662
107,522
227,841
350
392,375
Accumulated
depreciation
-
(76,878)
(162,471)
-
(239,349)
Net book value
56,662
30,644
65,370
350
153,026
Year ended 31
December 2021.
At 1 January
56,662
30,644
65,370
350
153,026
Additions
-
1,402
42,751
(350)
43,803
Revaluation surplus
3,051
-
-
-
3,051
Transfer from
investment property
23,630
-
-
-
23,630
Disposals and write-
offs
-
-
(1,525)
-
(1,525)
Impairment loss
-
(39)
-
-
(39)
Depreciation
-
(2,161)
(18,032)
-
(20,193)
At 31 December
83,343
29,846
88,564
-
201,753
At 1 January 2021.
Cost or deemed cost
83,343
108,885
269,067
-
461,295
Accumulated
depreciation
-
(79,039)
(180,503)
-
(259,542)
Net book value
83,343
29,846
88,564
-
201,753
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
98
NOTE 19 – PROPERTY, PLANT AND EQUIPMENT (continued)
Company
(in thousands
of HRK)
Year ended 31
December 2022.
Land
Buildings
Plant and
equipment
Assets under
construction
Total
At 1 January
83,343
29,846
88,564
-
201,753
Additions
-
86
13,993
-
14,079
Revaluation surplus
8,350
-
-
-
8,350
Disposals and
write-offs
(25,279)
(36)
(2,817)
-
(28,132)
Depreciation
-
(2,160)
(18,698)
-
(20,858)
At 31 December
66,414
27,736
81,042
-
175,192
At 31 December
2022.
Cost or deemed
cost
66,414
108,935
280,243
-
455,592
Accumulated
depreciation
-
(81,199)
(199,201)
-
(280,400)
Net book value
66,414
27,736
81,042
-
175,192
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
99
NOTE 19 – PROPERTY, PLANT AND EQUIPMENT (continued)
The assets were revalued and estimated at fair value. Other tangible assets are disclosed in the balance
sheet, based on historical cost less accumulated depreciation. Historical cost includes costs directly
attributable to the acquisition of an asset.
As at 31 December 2021, land and buildings of the Group and the Company with a net book value of
HRK 31,187 thousand were pledged as collateral for loans (note 31). As of December 31, 2022, there
are no liens on the lands and buildings of the Company and the Group.
Plants in the amount of HRK 21,499 thousand were pledged as a means of securing loan repayment on
December 31, 2022 (2021: HRK 0).
As of 31 December 2021, assets under foreclosure of the Group and the Company with a net book
value of HRK 112,312 thousand were pledged as collaterals for loans (note 31). In 2022, there are no
properties under foreclosure.
As at 31 December 2022, assets under finance lease where the Group and the Company are the lessee
amounted to HRK 1,491 thousand and HRK 821 thousand (2021: HRK 4,039 thousand and HRK 3,019
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
100
NOTE 20 – INVESTMENT PROPERTY
Investments in real estate at the level of the Company refer to part of the real estate that is in
intragroup lease to affiliated companies, the said assets are treated as ordinary real estate at
the level of the Group, and the Group does not carry out and publish fair value assessments
related to these assets.
(in thousands of HRK)
Land
Buildings
Plant and
equipment
Total
At 1 January 2021.
Cost
29,586
155,869
23,633
209,088
Accumulated depreciation
-
(122,586)
(7,464)
(130,050)
Net book value
29,586
33,283
16,169
79,038
Year ended 31 December 2021.
At 1 January
29,586
33,283
16,169
79,038
Additions
-
-
471
471
Revaluation surplus
(23,630)
-
-
(23,630)
Disposals and write-offs
-
-
(1)
(1)
Depreciation
-
(3,529)
(1,939)
(5,468)
At 31 December
5,956
29,754
14,700
50,410
At 31 December 2021.
Cost
5,956
155,869
24,103
185,928
Accumulated depreciation
-
(126,115)
(9,403)
(135,518)
Net book value
5,956
29,754
14,700
50,410
Year ended 31 December 2022.
At 1 January
5,956
29,754
14,700
50,410
Depreciation
-
(3,467)
(1,880)
(5,347)
At 31 December
5,956
26,287
12,820
45,063
At 31 December 2022.
Cost
5,956
155,869
24,103
185,928
Accumulated depreciation and
impairment losses
-
(129,582)
(11,283)
(140,865)
Net book value
5,956
26,287
12,820
45,063
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
101
NOTE 21 – LEASES
The company leases vehicles under rental agreements.
/ i / Leases recorded in the statement of financial position as at 31 December are as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Right of use assets:
Vehicles
968
2,809
634
2,236
Real estate
82
783
82
783
Equipment
366
448
-
-
1,416
4,040
716
3,019
Lease liabilities:
Non-current liabilities
1,122
2,417
723
2,081
Current liabilities
392
3,117
70
2,417
1,514
5,534
793
4,498
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
102
NOTE 21 – LEASES (continued)
/ ii / Long-term lease liabilities as at 31 December are as follows:
/ iii / Leases recorded in the statement of comprehensive income are as follows:
/ iv / An overview of the movement of assets with right of use is as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
From 1 to 2 years
310
1,959
70
1,625
From 2 to 5 years
82
1,158
-
792
392
3,117
70
2,417
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Depreciation
2,621
3,420
2,277
2,954
Interest expenses (note 14)
118
284
80
201
Lease cost related to short-term
lease (note 10)
25,731
32,768
38,650
38,299
28,470
36,472
41,007
41,454
Dalekovod
Group
Dalekovod
Group
Dalekovod
d.d.
Dalekovod
d.d.
2022.
2021.
2022.
2021.
(in thousands of HRK)
For the year ended 31. December 2020
Opening net book value of lease
recognized under IFRS 16
12,993
10,821
8,664
6,938
Accumulated depreciation
(8,953)
(5,533)
(5,645)
(2,691)
Net book value
4,040
5,288
3,019
4,247
Opening net book value
4,040
5,288
3,019
4,247
Additions
-
2,086
-
1,638
Exchange rate
(3)
86
(26)
88
Depreciation
(2,621)
(3,420)
(2,277)
(2,954)
Closing net book value
1,416
4,040
716
3,019
At 31 December 2021
Cost
12,990
12,993
8,638
8,664
Accumulated depreciation
(11,574)
(8,953)
(7,922)
(5,645)
Net book value
1,416
4,040
716
3,019
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
103
NOTE 22 – INVESTMENTS IN SUBSIDIARIES
/i/ Abolition of impairment in subsidiaries in 2022 in the amount of HRK 2,000 thousand applies to
Dalekovod Adria d.o.o. (note 14).
Impairment of investments in subsidiaries
Impairment of investments in subsidiaries, i.e. calculation of recoverable amount is based on approved
plans using the discounted cash flows method. Future cash flows derived from those plans are
discounted using the weighted average cost of capital between 6.3% and 8.7% (source:
http://pages.stern.nyu.edu/~adamodar/), depending on the industry in which the individual entity
operates.
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
At 1 January
46,906
46,906
Impairment /iii/
2,000
-
At 31 December
48,906
46,906
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2021
104
NOTE 22 – INVESTMENTS IN SUBSIDIARIES (continued)
At 31 December 2022, the Company owns shares in the following subsidiaries:
In 2022, the impairment was cancelled in Dalekovod Adria d.o.o. in the amount of HRK 2,000 thousand.
Name
Country of
incorporation
Primary
activity
2022.
Investment
Impairment
Net investment
%
(in thousands of HRK)
Dalekovod d.o.o., Ljubljana
Slovenia
Construction
100.00
2,075
-
2,075
Dalekovod d.o.o., Mostar
Bosnia and Herzegovina
Construction
100.00
210
-
210
Proizvodnja MK i OSO d.o.o., Dugo Selo
Croatia
Production
100.00
222,758
(196,472)
26,286
Dalekovod-projekt d.o.o., Zagreb
Croatia
Construction
100.00
4,614
-
4,614
Dalekovod TKS a.d., Doboj
Bosnia and Herzegovina
Production
97.25
20,344
(20,344)
-
Denacco Namibia (PTY) Ltd
Namibia
Construction
60.00
18
(18)
-
Cindal d.o.o. Doboj
Bosnia and Herzegovina
Production
95.01
5,191
(5,191)
-
Dalekovod-Adria d.o.o. Zagreb
Croatia
Other
100.00
32,098
(30,098)
2,000
Dalekovod EMU d.o.o. Zagreb
Croatia
Construction
100.00
11,063
-
11,063
EL-RA d.o.o. Zagreb
Croatia
Other
100.00
492
-
492
Dalekovod Libya za inženjering, zajedničko
poduzeće
Libya
Construction
65.00
879
(879)
-
Dalekovod Ukrajina d.o.o.
Ukraine
Construction
100.00
74
-
74
Dalekovod Norge AS
Norway
Construction
100.00
2,072
-
2,072
Cinčaonica usluge
Croatia
Other
100.00
20
-
20
301,908
(253,002)
48,906
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
105
At 31 December 2021, the Company owns shares in the following subsidiaries:
Subsidiary company Proizvodnja MK d.o.o. is the holder of a 100% share in the company Proizvodnja OSO.
Name
Country of
incorporation
Primary
activity
2021.
Investment
Impairment
Net investment
%
(in thousands of HRK)
Dalekovod d.o.o., Ljubljana
Slovenia
Construction
100.00
2,075
-
2,075
Dalekovod d.o.o., Mostar
Bosnia and Herzegovina
Construction
100.00
210
-
210
Proizvodnja MK i OSO d.o.o., Dugo Selo
Croatia
Production
100.00
222,758
(196,472)
26,286
Dalekovod-projekt d.o.o., Zagreb
Croatia
Construction
100.00
4,614
-
4,614
Dalekovod TKS a.d., Doboj
Bosnia and Herzegovina
Production
97.25
20,344
(20,344)
-
Denacco Namibia (PTY) Ltd
Namibia
Construction
60.00
18
(18)
-
Cindal d.o.o. Doboj
Bosnia and Herzegovina
Production
95.01
5,191
(5,191)
-
Dalekovod-Adria d.o.o. Zagreb
Croatia
Other
100.00
32,098
(32,098)
-
Dalekovod EMU d.o.o. Zagreb
Croatia
Construction
100.00
11,063
-
11,063
EL-RA d.o.o. Zagreb
Croatia
Other
100.00
492
-
492
Dalekovod Libya za inženjering, zajedničko
poduzeće
Libya
Construction
65.00
879
(879)
-
Dalekovod Ukrajina d.o.o.
Ukraine
Construction
100.00
74
-
74
Dalekovod Norge AS
Norway
Construction
100.00
2,072
-
2,072
Cinčaonica usluge
Croatia
Other
100.00
20
-
20
301,908
(255,002)
46,906
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
106
NOTE 23 – INVESTMENTS IN ASSOCIATES
Associates are as follows:
NOTE 24 – INVESTMENTS IN JOINT VENTURE
The company has a 50% share in Officium partner d.o.o., the value of the share was reduced to zero on 31
December 2019.
Financial information about a joint venture on 31 December 2021 in which the Company has a 50% interest
can be summarized as follows:
In 2022, and in accordance with the Agreement on the purchase and sale of a business share dated June 3,
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
At beginning of year
4
4
4
4
At end of year
4
4
4
4
Dalekovod Group
Holding in %
(in thousands of HRK)
2022.
2021.
2022.
2021.
TLM Group Members
4
4
22-25
22-25
Total
4
(in thousands of HRK)
Assets
Liabilities
Revenue
Net income /
(loss)
Officium partner d.o.o.
656,736
665,650
36,551
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
107
NOTE 25 – FINANCIAL INSTRUMENTS BY CATEGORY
Group
Financial instruments do not include transactions with employees, receivables/payables for contributions, taxes and receivables/payables for advances received.
(in thousands of HRK)
Financial assets
at amortized
cost
Financial assets
at FVTPL
Total
Financial assets
at amortized
cost
Financial assets
at FVTPL
Total
Note
2022.
2022.
2022.
2022.
2021.
2021.
Financial assets
Trade receivables
26.28
278,484
-
278,484
169,204
-
169,204
Receivables by construction contracts
28
130,813
-
130,813
85,249
-
85,249
Loans receivable and deposits
26.28
75,905
-
75,905
96,172
-
96,172
Interest receivable
28
-
-
-
357
-
357
Other receivables
28
51,200
-
51,200
52,466
-
52,466
Cash and cash equivalents
29
28,509
-
28,509
57,842
-
57,842
Total
564,911
-
564,911
461,290
-
461,290
Financial liabilities
Loans
31
17,914
-
17,914
226,611
65,680
292,291
Bonds
31
13,019
-
13,019
14,367
-
14,367
Finance lease
31
31,492
-
31,492
48,233
-
48,233
Mezzanine debt
32
-
-
-
-
31,711
31,711
Trade payables
33
188,685
-
188,685
161,619
3,720
165,339
Other payables
33
3,045
-
3,045
39,460
-
39,460
Total
254,155
-
254,155
490,290
101,111
591,401
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
108
NOTE 25 – FINANCIAL INSTRUMENTS BY CATEGORY (continued)
Company
Financial instruments do not include tax payables, payables to employees, taxes and contributions and advances received.
(in thousands of HRK)
Financial assets
at amortized
cost
Financial assets
at FVTPL
Total
Financial assets
at amortized
cost
Financial assets
at FVTPL
Total
Note
2022.
2022.
2022.
2022.
2021.
2021.
Financial assets
Trade receivables
26.28
266,782
-
266,782
136,735
-
136,735
Receivables by construction contracts
28
111,163
-
111,163
70,375
-
70,375
Loans receivable and deposits
26.28
95,924
-
95,924
111,235
-
111,235
Interest receivable
28
691
-
691
894
-
894
Receivables from subsidiaries for profit share
739
-
739
2,050
-
2,050
Other receivables
28
50,821
-
50,821
51,848
-
51,848
Cash and cash equivalents
29
21,377
-
21,377
50,727
-
50,727
Total
547,497
-
547,497
423,864
-
423,864
Financial liabilities
Loans
31
25,068
-
25,068
234,050
65,680
299,730
Bonds
31
17,185
-
17,185
18,962
-
18,962
Finance lease
31
30,523
-
30,523
46,810
-
46,810
Mezzanine debt
32
-
-
-
-
36,303
36,303
Trade payables
33
174,063
-
174,063
116,821
3,720
120,541
Other payables
33
2,313
-
2,313
35,434
-
35,434
Total
249,152
-
249,152
452,077
105,703
557,780
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
109
NOTE 26 – LOANS AND RECEIVABLES
Deposits
Deposits are mostly denominated in EUR and used as collateral for bank guarantees. Some deposits are not
interest bearing and other had effective interest rates, ranging from 0.04% to 0.57%.
Long-term guarantee deposits refer to retentions or retentions for each invoice / situation issued, which
amounts are defined in accordance with the provisions of the contract. The amounts of retentions for
individual projects vary between 5% -10% and are cumulated up to a certain contract value.
While for the Norwegian market the specific cumulation of retention value is 10% for each invoice issued, at
the same time this amount is limited to a maximum of 5% of the total contract value, so on the other hand
local retentions are characterized by cumulation in percentage defined by the contract. In all cases, the
retention is released after the takeover of the facility by the Investor, after the construction period and if the
contracts allow it after the partial takeover of part of the facility with the consent of the Investor.
Loans to other companies
During 2022, previously adjusted loans in the amount of HRK 13,504 thousand were permanently written off
due to the impossibility of collecting them.
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Long-term deposits
6,926
7,197
6,854
6,760
Long-term guarantee deposits
33,970
47,749
33,970
47,749
Long-term trade receivables
-
4,822
-
4,822
- housing loans and other loans to
employees
317
486
105
181
- loans to other companies
-
13,504
-
13,504
- loans to subsidiaries
-
-
1,280
1,733
Impairment of long-term deposits
and loans receivable
(1,666)
(16,093)
(1,666)
(16,093)
Impairment of long-term deposits
and loans receivable
-
(4,822)
-
(4,822)
Total long-term deposits and
loans receivable
39,547
52,843
40,543
53,834
Long-term loans and deposits
given
39,547
52,843
40,543
53,834
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
110
NOTE 26 – LOANS AND RECEIVABLES (continued)
NOTE 27 – INVENTORIES
Cost of raw materials and supplies recognised in the income statement is disclosed in note 10.
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
At 1 January
16,093
16,960
16,093
16,960
Discount of guarantee deposits
(923)
(867)
(923)
(867)
(13,504)
-
(13,504)
-
At 31 December
1,666
16,093
1,666
16,093
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Raw materials (restated)
39,833
32,569
5,830
5,891
Finished and semi-finished goods and work in
progress (restated)
25,941
26,225
-
48
Spare parts and small inventories
5,462
5,337
2,530
2,095
Trade goods (restated)
5,797
9,044
73
15
Advances for inventories
2,034
-
-
-
79,067
73,175
8,433
8,049
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
111
NOTE 28 – TRADE AND OTHER RECEIVABLES
/i/ Other short-term loans and loans to subsidiaries are with annual interest rates from 2%-2.4%. Interest for
domestic loans is adjusted according to the Decision on interest rates on loans between related parties, while
part of the loan is interest-free (0%). Loans to related parties are approved for a period of up to 6 months
and are secured by promissory notes and promissory notes. Credit risk related to credit claims is limited due
to the allocation of these claims to various customers.
/ii/ Advances were granted to suppliers for the purchase of material and equipment, as well as for project
design services.
/iii/ Short-term deposits are mostly dedicated time deposits whose purpose is insurance for issued bank
placements. All deposits are due within a period of one year after the reporting date. Part of the deposits
are interest-free, while during 2022 the effective interest rates for deposits with the agreed interest rate
are 0.01%-0.39%.
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Domestic trade receivables
116,245
141,239
138,296
155,814
Foreign trade receivables
167,925
106,694
133,279
55,092
Impairment of trade receivables
(5,686)
(83,551)
(4,793)
(78,993)
278,484
164,382
266,782
131,913
Receivable from customers for contract work
130,813
85,249
111,163
70,375
Guarantee deposits – current portion
34,578
47,196
34,560
47,166
Short-term deposits /iii/
1,569
1,408
525
924
Loans to subsidiary
-
-
22,478
17,096
Other short-term loans /i/
1,799
5,287
1,536
4,973
Interest receivable
-
8,458
744
8,995
Dividend receivable
-
-
739
2,050
Other receivables
51,201
52,466
50,821
51,848
Impairment of other financial assets
(1,589)
(13,841)
(3,771)
(16,037)
Total financial assets
496,855
350,605
485,577
319,303
Advances /ii/
58,019
85,706
53,664
80,294
Receivable from employees
106
375
106
365
VAT receivable
13,236
8,359
11,677
5,755
Outstanding VAT receivable
2,156
1,780
-
-
Prepaid expenses
9,766
6,274
9,629
5,995
Impairment of non-financial assets (note 11)
-
(6,247)
-
(6,247)
Total non-financial assets
83,283
96,247
75,076
86,162
580,138
446,852
560,653
405,465
Receivables for subscribed but unpaid capital /v/
-
410,000
-
410,000
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
112
NOTE 28 – TRADE AND OTHER RECEIVABLES (continued)
/iv/ Other receivables include receivable from Ministry of finance in the amount of HRK 50,000 thousand
(2021: HRK 50,000 thousand) which are expected to be collected upon completion of the court process.
/v/ Receivables for subscribed, but unpaid capital in the amount of HRK 410,000 thousand on 31 December
relate to the recapitalization of the Company as in February 2022, when the same receivables were collected.
The ageing of trade receivables is as follows:
Movements on the provision for impairment of trade receivables and other financial assets are as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Not due
195,563
124,783
192,283
83,035
Up to 90 days
37,480
26,025
24,461
17,210
From 91 to 180 days
16,095
3,894
17,918
4,883
Over 180 days
29,346
9,680
32,120
26,785
278,484
164,382
266,782
131,913
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
At 1 January
97,392
92,546
95,030
89,000
Impairment of trade receivables and other financial
assets (note 11)
233
5,135
25
6,157
Collected amounts (note 11)
(309)
(139)
(306)
(22)
Change after adjustment to IFRS 9
262
-
(196)
(105)
(222)
-
(222)
-
Receivables written-off during the year as
uncollectible
(90,081)
(150)
(85,767)
-
At 31 December
7,275
97,392
8,564
95,030
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
113
NOTE 28 – TRADE AND OTHER RECEIVABLES (continued)
The carrying amounts of the Group’s and the Company’s financial assets are denominated in the following
currencies:
The fair value of trade receivables approximates their carrying amount.
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
HRK
256,357
175,284
289,954
191,519
EUR
43,424
63,143
3,765
13,632
NOK
47,095
52,765
45,129
52,762
SEK
88,545
15,281
87,101
15,281
UAH
1
4,349
-
4,345
Other currencies
61,433
39,784
59,628
41,764
Total
496,855
350,606
485,577
319,303
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
114
NOTE 29 – CASH AND CASH EQUIVALENTS
Cash and cash equivalents are denominated in the following currencies:
NOTE 30 – SHAREHOLDERS’ EQUITY
Share capital
The share capital as at 31 December 2022 amounts to HRK 412,472 thousand (31 December 2021: HRK 2,472
thousand) and consists of 41,247,193 shares (2021: 247,193 shares). Nominal value of a share amounts to
HRK 10 (31 December 2021: HRK 10).
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Cash at bank and petty cash in domestic currency
7,963
4,751
6,850
2,000
Cash at bank and petty cash in foreign currency
20,546
52,707
14,527
48,727
Deposits at bank in foreign currecny
-
384
-
-
28,509
57,842
21,377
50,727
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
EUR
6,951
4,518
1,560
353
NOK
3,863
26,649
3,862
26,646
SEK
6,661
12,624
6,661
12,624
UAH
181
2,702
43
2,507
Other currencies
2,890
6,598
2,401
6,597
Total
20,546
53,091
14,527
48,727
Number of shares
Holding
2022.
2021.
2022.
2021.
Napredna energetska rješenja d.o.o.
31,000,000
-
75.16%
0.00%
Financial institutions
7,004,080
17,837
16.98%
7.22%
Foreign company
2,401,233
402
5.82%
0.16%
Konsolidator d.o.o.
-
150,000
0.00%
60.68%
Individuals
200,729
71,981
0.49%
29.12%
Treasury shares
988
988
0.00%
0.40%
Others
640,163
5,985
1.55%
2.42%
41,247,193
247,193
100%
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
115
NOTE 30 – SHAREHOLDERS’ EQUITY (continued)
The majority owner of Dalekovod d.d. is company Napredna energetska rješenja d.o.o. The owners of
Napredna energetska rješenja d.o.o. are Končar – Ulaganja d.o.o. and Construction Line Limited. Company
Share premium
Share premium resulted from the issue of shares in 2011 when the Company realised a premium of HRK
83,151 thousand, which was reduced by the cost of issuing new shares of HRK 2,672 thousand. During 2014
part of share premium in the amount of HRK 70,424 thousand was used to cover losses. Furthermore, during
2014 share premium was increased as a result of increase in share capital, i.e. transfer of debts towards
suppliers into share capital as part of the pre-bankruptcy settlement in the amount of HRK 76,695 thousand
and decreased by the cost of issuing new shares in the amount of HRK 608 thousand.
Legal reserves
The legal reserve is required under Croatian law whereby a minimum of 5% of the profit for the year is
required to be allocated to legal reserves until they reach 5% of the Company's share capital. Legal reserves
are not distributable.
Treasury shares
As at 31 December 2022, the Company owns 692 treasury shares (2021: 989 treasury shares).
Statutory and other reserves
Statutory and other reserves consist of statutory reserves in the amount of HRK 8,466 thousand (2021: HRK
8,466 thousands) and reserves for own shares in the amount of HRK 8,466 thousand (2021: HRK 8,466
thousand).
Revaluation reserves
In 2021, based on the assessment of a certified appraiser, the revaluation of land and buildings at the Žitnjak
and Dugo Selo locations was made. In 2022, the revaluation of the land in Žitnjak was carried out, and it was
increased by HRK 6,847 thousand (assets increased by HRK 8,350 thousand). Dugo Selo is no longer owned
by Dalekovod d.d. these revaluation reserves were reduced by HRK 1,800 thousand.
The fair value of land and buildings at the site in Žitnjak was determined using the income method and
comparative method. The value of the property is determined based on the comparable value of similar
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
116
NOTE 31 – BORROWINGS
* The average interest rate for loans refers to senior debt and credit of the NUF branch, while the
interest rate is not calculated for separate rights.
Gross liabilities under the Lease liabilities – minimum lease payments:
Average
interest
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
rate
2022.
2021.
2022.
2021.
Non-current
Loans from banks and
subsidiaries
4.15%
-
25,279
-
25,279
Bonds
4.00%
11,606
13,009
15,320
17,170
Finance lease /i/
4.40%
22,406
22,195
21,823
21,178
34,012
60,483
37,143
63,627
Current
Loans from banks and
subsidiaries
4.15%-
9.15%
17,914
267,012
25,068
274,451
Bonds
4.00%
1,413
1,358
1,865
1,792
Finance lease /i/
4.40%
9,086
26,038
8,700
25,632
28,413
294,408
35,633
301,875
Total borrowings
62,425
354,891
72,776
365,502
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Up to 1 year
9,258
31,132
8,872
25,969
Between 1 to 5 years
22,413
17,865
21,830
21,605
Over 5 years
-
-
-
-
31,671
48,997
30,702
47,574
Future finance costs under finance lease
(179)
(764)
(179)
(764)
Present value of liabilities under finance lease
31,492
48,233
30,523
46,810
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
117
NOTE 31 – BORROWINGS (continued)
Financial debt (long-term and short-term) in relation to 2021. decreased because of the repayment of debts
under the pre-bankruptcy settlement in the first quarter of 2022 and the write-off of the liability for the
bank's separate debt related to the Dugo Selo property.
On February 11, 2022, it settled its debts for due obligations under the pre-bankruptcy settlement. The total
value of the loan from the pre-bankruptcy settlement, which was settled, amounts to HRK 357,263 thousand,
and the same is reported as part of short-term liabilities.
In the total amount of loans received from banks and subsidiaries disclosed by the Company and the Group
on 31 December 2022, part of the debt in the amount of 17,914 thousand refers to a bank in Norway that
has a lien on the Company's movable assets up to a total value of HRK 21,498 thousand (NOK 30 million).
The Group's borrowings in the total amount of HRK 49,406 thousand (2021: HRK 32,317 thousand) are
exposed to interest rate changes, since the contracted interest rate is variable. Other borrowings in the
amount of HRK 13,019 thousand, have a fixed interest rate and relate to bonds and financial leasing based
on a pre-bankruptcy settlement (year 2021: HRK 322,520 thousand, excluding loans charged from the
Company's assets, have a fixed interest rate and relate to loans, bonds and financial leasing based on a pre-
bankruptcy settlement).
Interest rates for the bonds are a fixed 4%, for the loan granted to the Dalekovod NUF subsidiary with a
repayment term until the end of 2023, the currently valid interest rate is 9.15%, while the variable interest
rate for the financial lease ranges between 2.27%-4.51 %.
The Company and the Group as of 31 December 2022 and 31 December 2021, according to the accounting
policy for assets under foreclosure, have fair valued the corresponding loan obligation and other liabilities
(guarantees) which relate to assets under foreclosure (notes 6, 19 and 20).
The Group's management with key financial creditors carries out financial restructuring activities in order to
improve the financial position and liquidity of the Company and the Group.
The borrowings are denominated in the following currencies:
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
EUR
5,739
137,007
12,829
149,974
HRK
9,241
173,299
10,907
171,529
Other
47,445
44,585
49,040
43,999
Total
62,425
354,891
72,776
365,502
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
118
NOTE 31 – BORROWINGS (continued)
The maturity of long-term borrowings is as follows:
NOTE 32 – MEZZANINE DEBT
Movements in Mezzanine debt are as follows:
The mezzanine debt of the Group and the Company is denominated in the following currencies:
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Between 1 to 5 years
-
-
-
-
Over 5 years
-
25,279
-
25,279
-
25,279
-
25,279
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Short-term
-
31,711
-
36,303
-
31,711
-
36,303
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
At 1 January
31,711
30,723
36,303
35,117
Additions
-
988
-
1,186
Decrease
(31,711)
-
(36,303)
-
At 31 December
-
31,711
-
36,303
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
HRK
-
19,129
-
23,721
EUR
-
12,582
-
12,582
-
31,711
-
36,303
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
119
NOTE 33 – TRADE AND OTHER PAYABLES
Long-term
Short-term
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Trade payables
-
39
-
39
-
39
-
39
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
Domestic trade payables
99,484
90,815
100,808
79,985
Foreign trade payables
89,201
74,485
73,255
40,517
188,685
165,300
174,063
120,502
Interest payable
637
32,525
1,290
33,129
Dividends payable (note 15)
-
101
-
101
Contracted liabilities from acquisition
-
10
-
10
Other accruals and liabilities
2,408
6,758
1,023
2,128
Due to banks arising from collected
guarantees
-
66
-
66
Financial liabilities
191,730
204,760
176,376
155,936
Advances
78,679
86,276
71,592
81,993
Deferred income
41,530
43,566
41,530
43,566
Due to employees
21,816
27,334
18,003
23,575
VAT payable
12,016
7,224
8,074
8,160
Taxes and contributions
4,774
5,935
2,874
3,623
Unused vacation days
4,392
4,711
2,813
2,921
Other current liabilities
537
879
500
847
Non-financial liabilities
163,744
175,925
145,386
164,685
355,474
380,685
321,762
320,621
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
120
NOTE 33 – TRADE AND OTHER PAYABLES (continued)
The Group's and the Company's short-term financial liabilities are denominated as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of HRK)
2022.
2021.
2022.
2021.
HRK
102,293
103,871
103,248
88,344
EUR
27,490
76,466
13,974
40,181
NOK
12,996
5,770
13,422
6,165
SEK
4,675
3,482
4,675
3,482
UAH
40,734
13,360
40,734
13,360
Other currencies
3,542
1,811
323
4,404
Total
191,730
204,760
176,376
155,936
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
121
NOTE 34 – PROVISIONS
Group
Company
(in thousands of HRK)
Jubilee
awards
Severance
payments
Other
provisions
Total
At 1 January 2022.
2,131
4,461
23,045
29,637
Increase
194
239
1,545
1,978
Decrease
(558)
(2,031)
(3,404)
(5,993)
At 31 December 2022.
1,767
2,669
21,186
25,622
Analysis:
2022.
2021.
Non-current portion
24,677
27,139
Current portion
945
2,498
Total
25,622
29,637
(in thousands of HRK)
Jubilee
awards
Severance
payments
Other
provisions
Total
At 1 January 2022.
1,132
2,318
22,635
26,085
Increase
117
157
1,545
1,819
Decrease
(255)
(619)
(3,243)
(4,117)
At 31 December 2022.
994
1,856
20,937
23,787
Analysis:
2022.
2021.
Non-current portion
23,070
23,930
Current portion
717
2,155
Total
23,787
26,085
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
122
NOTE 34 – PROVISIONS (continued)
Provisions for jubilee awards and retirement benefits
These provisions relate to estimated long-term employee benefits for jubilee awards and regular retirement
benefit at the time of retirement according to the Collective Labour agreement. The liability is calculated by
independent actuaries. Significant assumptions used by the actuary are as follows: an annual leaver's rate of
9.18% for the Group, and 11.6% for the Company (2021: Group 8.95%, Company 11.3%); the age of
retirement is determined for each individual employee considering their present age and the overall realised
years of service. The average age of retirement used in the calculation for the Company is 62 years and the
Group is 61 years for men and for women it is 61 for the Company and 62 for the Group (2021.: the average
age of retirement used in the calculation for the Company and the Group is 62 years for men, and for women
61 years for the Company and 62 years for the Group).
Other provisions
Other provisions relate to provisions for litigation in the amount of HRK 21,187 thousand for the Group and
HRK 20,937 thousand for the Company (2021: HRK 21,617 thousand for the Group and HRK 21,207 thousand
for the Company). There are no reservations for bonus management in 2022 (2021: HRK 1,428 for both the
Group and the Company).
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
123
NOTE 35 – RELATED PARTY TRANSACTIONS
Parties are considered to be related if one of the parties has the power to exercise control over the other
party, if it is under common control or if it has significant influence over the other party's operations.
In the ordinary course of business operations, the Company enters into related party transactions, which
include the purchase of goods and services and loans. The nature of services with related parties is based on
arm’s length terms. In addition to the subsidiaries presented in note 22, associates presented in note 23 and
joint ventures presented in note 23, the Company’s related parties include its Management Board, Executive
Directors, their related parties.
Related party transactions include owner Napredna energetska rješenja d.o.o and its founders Končar –
Ulaganja d.o.o. i Construction Line Limited as well as their related parties. Končar – Ulaganja d.o.o. is 100 %
owned by Končar – Elektroindustrija d.d.
The Company has no transactions with the ultimate owner.
Items in the income statement for the year and balances in the statement of financial position at the end of
the year that relates to subsidiaries are as follow:
Revenues and expenses
(in thousands of HRK)
2022.
2021.
Sales revenue
5,503
117,058
Rental income
29,402
22,598
Interest income
507
217
Dividend income
2,113
4,900
Interest income
10,101
6,292
47,626
151,065
Cost of goods sold
-
28,215
Cost of raw materials and supplies
82,141
22,778
Subcontractor services
3,822
4,415
Other operating expenses
-
5
Interest expesne and foreign exchange losses
321
46
86,284
55,459
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
124
NOTE 35 – RELATED PARTY TRANSACTIONS (continued)
Receivables, payables and loans
(in thousands of HRK)
2022.
2021.
Trade receivables
62,990
59,679
Receivables for profit share
739
-
Impairment of trade receivables
(15,562)
(15,562)
Interest receivable
744
449
Impairment of interest receivable
-
(13)
Advances
6,340
6,123
Loans receivable
23,856
20,090
Impairment of loans receivable
(3,783)
(2,183)
75,324
68,583
Trade payables
28,002
8,743
Mezzanine debt
-
4,592
Interest payable
652
463
Other accruals and liabilities
384
384
Bonds
4,165
4,595
Advances
-
0
Loans payable
7,154
7,444
40,357
26,221
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
125
NOTE 35 – RELATED PARTY TRANSACTIONS (continued)
Items in the income statement for the year and balances in the statement of financial position at the end of
the year that relates to joint ventures are as follow:
Receivable related to given loans is fully impaired.
Revenues and expenses
(in thousands of HRK)
2022.
2021.
Sales revenue
-
-
Interest income
-
246
Other income
-
-
-
246
Cost of raw materials and supplies
-
-
Impairment of financial assets - interests
-
737
-
737
Receivables, payables and loans
(in thousands of HRK)
2022.
2021.
Trade receivables
-
-
Interest receivable
-
491
Impairment of interest receivable
-
737
Loan receivables
-
-
-
1,228
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
126
NOTE 35 – RELATED PARTY TRANSACTIONS (continued)
The company's transactions with Končar Group companies:
Revenues and expenses
(in thousands of HRK)
2022.
2021.
Sales revenue
7,196
-
7,196
-
Cost of raw materials and supplies
164
-
Subcontractor services
183
-
Other operating expenses
417
-
764
-
Receivables, payables and loans
(in thousands of HRK)
2022.
2021.
Trade receivables
1,158
-
1,158
-
Trade payables
820
-
820
-
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
127
NOTE 35 – RELATED PARTY TRANSACTIONS (continued)
Transactions with key management
Key management consists of Management Board, Executive Directors, and Heads of departments, 28 people
in total (2021: 13 people). Remuneration to key management at Group’s level amounted to HRK 13,631
thousand (2021: HRK 9,538 thousand), while remuneration at the level of the Company amounted to HRK
11,142 thousand (2021: 6,670 thousand).
Remuneration to Supervisory Board in 2022 amounted to HRK 391 thousand (2021.: HRK 404 thousand).
Dalekovod Group transactions with Končar Group companies:
Revenues and expenses
(in thousands of HRK)
2022.
2021.
Sales revenue
11,067
-
11,067
-
Cost of raw materials and supplies
164
-
Subcontractor services
281
-
Other operating expenses
591
-
1,037
-
Receivables, payables and loans
(in thousands of HRK)
2022.
2021.
Trade receivables
1,434
-
1,434
-
Trade payables
1,023
-
Advances
104
-
1,127
-
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
128
NOTE 36 – CONTINGENCIES AND COMMITMENTS
As of 31 December 2022, the Group has numerous contracts which have commenced, but have not been
completed. Costs to be incurred in the future arising from these contracts are estimated in the amount of
HRK 1,551,677 thousand (2021: HRK 938,534 thousand).
As at 31 December 2022, the Group and the Company are exposed to potential liabilities arising from issued
bank guarantees (as collateral for collection and security for the quality of work performed) in the total
amount of HRK 393,552 thousand and HRK 331,217 thousand (2021: HRK 419,573 thousand Group and HRK
368,650 thousand Company). The Company is additionally exposed as a co-debtor for borrowings of
subsidiaries in the total amount of HRK 48,809 thousand (2021: HRK 43,515 thousand). The Group and the
Company estimate that it is not certain that any contingent liabilities arising from bank guarantees will be
collected, as the Group and the Company, as in previous periods, fulfil all contractual liabilities arising from
the projects.
In the ordinary course of operations, the Group was plaintiff and defendant in several legal disputes. Based
on the opinion of the Management Board and its legal counsel, provision have been created for those legal
dispute that will potentially result in losses (note 34). In addition to those court cases for which provision
have been made, there are legal disputes for which Management Board and legal counsel believe will not
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
129
NOTE 37 – DISCONTINUED OPERATIONS
On July 10, 2020, a settlement was concluded with the creditor from the Pre-Bankruptcy Settlement, HETA
Asset Resolution d.o.o., on regulating the relationship from three leasing contracts of which HETA is the
exclusive creditor on the property which in nature is a galvanizing plant in Dugo Selo. HETA took over the
leased property by settlement and sold it to the end customer, NFS Cink d.o.o. members of the Czech Signum
Group. The entire segment of galvanizing services has been put into discontinued operation. The impact on
the statements of comprehensive income and financial position is shown below.
Impact on the statement of comprehensive income:
Dalekovod
Group
discontinued
operations
Dalekovod
Group
discontinued
operations
Dalekovod
d.d.
discontinued
operations
Dalekovod
d.d.
discontinued
operations
(all amounts are expressed in thousands of HRK)
2022
2021
2022
2021
Other income
190
20
-
-
Cost of materials and services
(777)
(2)
-
-
Staff costs
(52)
(35)
-
-
Other operating expenses
(131)
(152)
(406)
(1,262)
Operating gain/(loss)
(770)
(169)
(406)
(1,262)
Finance income
2
14
-
-
Finance costs
-
(24)
-
-
2
(10)
-
-
Discontinued operations
(768)
(179)
(406)
(1,262)
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
130
NOTE 37 – DISCONTINUED OPERATIONS (continued)
NOTE 38 - EVENTS AFTER THE REPORTING DATE
Among the more significant events after the balance sheet date, we would highlight the opening of a branch
in Slovenia in March 2023. On 31.03.2023. Mr. Ivan Kurobasa ceases to be a member of the Management
Board.
Due to the current situation in Ukraine, force majeure has been declared on both projects that we had as
active during 2022. With the proclamation of force majeure, all actions on the project were suspended.
Dalekovod d.d. does not expect losses on these projects due to the very structure of the Investor Agreement
Dalekovod
Group
discontinued
operations
Dalekovod
Group
discontinued
operations
Dalekovod
d.d.
discontinued
operations
Dalekovod
d.d.
discontinued
operations
(all amounts are expressed in thousands of HRK)
2022
2021
2022
2021
ASSETS
Trade and other receivables
72
285
-
136
Cash and cash equivalents
50
-
-
-
Assets held for sale
122
285
-
136
LIBILITIES
Provisions
173
114
-
-
Trade and other payables
725
437
-
-
Liabilities held for sale
898
551
-
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2022
131
NOTE 38 - EVENTS AFTER THE REPORTING DATE (continued)
The following is a presentation of the Balance Sheet and Profit and Loss Account as at 31 December 2022 and
as at 31 December 2021:
From the above it can be seen that the company has receivables and liabilities in significant amounts,
however due to the mutual connection or interdependence of one another, we consider that it is not
needed to adjust the value with the stated claims.
Payment according to crucial suppliers (subcontractors) for both projects is related to the "BACK TO BACK"
conditions, ie payment only after payment. According to the mentioned projects, all bank guarantees have
been withdrawn, which will be reissued after the continuation of the projects and the revision of the
Agreement.
The Government of the Republic of Croatia adopted the Decision on the announcement of the introduction
of the euro as the official currency in the Republic of Croatia (published in "Official Gazette" No. 85/22). With
the aforementioned decision, the euro becomes the official monetary unit and legal currency in the Republic
of Croatia on 1 January 2023. The fixed conversion rate is set at HRK 7.53450 for one euro. The introduction
of the euro as the official currency in the Republic of Croatia represents a change in the functional currency
that will be calculated prospectively and does not represent an adjusting subsequent event.
Ukraine branch
31.12.2022
31.12.2021
Property, plant and equipment
2
4
Inventories
24
460
Trade and other receivables
80,029
68,477
Cash and cash equivalents
118
2,507
Total assets
80,173
71,448
Accumulated loss
(2,204)
1,615
Profit/Loss for the financial year
1,979
(3,818)
Total equity
(225)
(2,203)
Trade and other payables
80,398
73,651
Total equity and liabilities
80,173
71,448