Email: dalekovod@dalekovod.hr
Website: www.dalekovod.com
CONSOLIDATED AND SEPARATE
ANNUAL REPORT 2023
DALEKOVOD GROUP
Dalekovod d.d.
TABLE OF CONTENTS
Management Board report
1
Responsibility for consolidated and non-consolidated annual report
35
Independent Auditors’ Report to the shareholders of Dalekovod d.d.
37
Consolidated and separate income statement
44
Consolidated and separate statement of other comprehensive income
45
Consolidated and separate statement of financial position
46
Consolidated and separate statement of changes in equity
48
Consolidated and separate statement of cash flows
50
Notes to financial statements
52
THE GROUP'S OPERATING INCOME, EBITDA AND NET PROFIT
(I-XII 2023)
OPERATING INCOME, EBITDA AND NET PROFIT OF THE COMPANY
DALEKOVOD D.D.
(I-XII 2023)
OPERATING INCOME
167.8 million EUR
EBITDA ADJUSTED
7.8 million EUR
LOSS OF THE PERIOD
-3.2 million EUR
OPERATING INCOME
122.4 million EUR
EBITDA ADJUSTED
5 million EUR
LOSS OF THE PERIOD
-4.7 million EUR
1
MANAGEMENT BOARD REPORT
Key messages
Even though macroeconomic and political circumstances are still uncertain and they are especially
underscored by the latest situation in Israel, the continuation of the Russian aggression on the Ukraine,
as well as the slowing down of economic activities of the most significant economic partners of the
Republic of Croatia in the EU, and including the announcement of the possible recession, all markets
where Dalekovod Group is conducting business (Croatia, Sweden, Norway, Slovenia, Bosnia and
Herzegovina, Macedonia, Germany and the Middle East) are experiencing growth of business activities
in our business segment, accompanied by strong momentum in investments. Dalekovod Group has
successfully positioned itself despite such circumstances and business progress is especially seen in
tender activities and new contracting. Group’s Book of contracts as of December 31, 2023 amounted
more than EUR 281 million, thus positively influencing the expected growth and income predictability
in the following period, as well as the expected growth of business profitability.
As the result of such improved business and market position, the Group recorded growth of operating
income of 20-percent compared to the same period last year, amounting to EUR 168 million. This is
the expected continuation of the trend that has been present from the second half of 2022 and
throughout the first nine months of 2023, and the most significant influence on the growth of Group
revenue came from parent company, Dalekovod d.d. (hereinafter: Company) and Dalekovod OSO
d.o.o. Other companies that form the most significant part of Group revenue - Dalekovod Mostar
d.o.o., Dalekovod Projekt d.o.o., Dalekovod MK d.o.o. and Dalekovod Ljubljana d.o.o. - achieved results
in line with plans.
Normalized Group EBITDA in reporting period is EUR 7.8 million and is EUR 1.7 million higher
compared to previous period.
Dynamics of implementation, high level of contacted business and increased project efficiency
contribute the most to the positive results of Group business activities, even though the usual seasonal
effect and slightly worse weather conditions than expected have caused postponement of works on
certain projects. Continuation of such positive trends is expected also in the following period.
By the recapitalization and the successful closure of pre-bankruptcy settlement, Dalekovod Group can
continue the new development phase in which all present experiences and acquired knowledge can
be utilized and continue the successful implementation of complex projects in significantly difficult
circumstances, in combination with implemented restructuring of business processes and synergic
effects within Končar Group.
Industry in which Dalekovod Group competes shows the beginning of a significant conjuncture and
exceptional dynamics in the future period due to several key reasons: (i) relatively old transmission
network requiring reconstruction; (ii) green and digital transition activities - shift towards renewable
energy sources and the general trend of switching from energy produced from traditional fossil fuels
to electric energy from renewable sources; (iii) implementation of tenders postponed in previous
periods due to COVID 19 pandemic; (iv) although resolution to the Ukrainian crisis is not likely soon,
situation on the materials and raw materials market is stabilized; the latest events and the situation in
the Middle East that exacerbate certain risks are monitored.
In the coming period we expect continuation of the strong tender activity in energy and transport
infrastructure, with high level of predictability, through implementation of National recovery and
2
resiliency projects in the Republic in Croatia and through strong investment activity as implementation
of activities of green and digital transition on markets where Dalekovod Group traditionally conducts
business and has strong presence.
Implemented financial and operative restructuring will enable Dalekovod Group to continue business
activities on traditional markets of Scandinavia, region, Middle and Eastern Europe, Middle East and
home markets with the possibility of increase of business profitability. Likewise, Dalekovod Group will
support the continuation of stronger entrance onto new markets, such as Germany, where first
projects were successfully completed.
Dalekovod Group will continue significant investments in health and safety of its employees and it will
increase investments into sustainable development with the goal of achieving balance between the
environment, community and our activities in order to fulfil requirements for development without
endangering the prospects of future generations. Therefore, it is important to emphasise that the
projects that Dalekovod Group executes within energetics and infrastructure domains directly
contribute to the implementation of goals of green transition.
Financial results for 2023
*In accordance with the international financial standards, the items in the profit and loss account and in the reports on the
Group’s and the Company’s financial position in the previous period, i.e., in 2022 and in 2023, have been adjusted for the
financial impact of the mentioned transaction, i.e. discontinued operation.
** The Company adjusted the value of the claim against the Ministry of Finance/RO from 2016 based on the non-final
judgment received from November 2023 in court proceedings P-2053/2018, which rejected the Company's claim. Despite the
above, the Company initiated an appeal against the aforementioned non-final judgment and on March 25, 2024, received a
decision of the High Commercial Court of the Republic of Croatia by which it annulled the first-instance judgment and
returned the case to the Commercial Court in Zagreb for a new decision.
Indicators (in EUR 000)
Dalekovod Group
Dalekovod d.d.
2023
2022
Index
2023
2022
Index
Total revenue
167,819
139,395
120
122,353
100,641
122
Sales revenue
165,790
136,645
121
119,637
94,298
127
Operating expenses
(170,100)
(137,272)
124
(127,044)
(99,834)
127
Amortization
(3,451)
(3,979)
(3,060)
(3,627)
EBITDA ADJUSTED
7,806
6,102
+1,704 €
5,005
4,434
+571 €
EBIT Adjusted
4,355
2,123
+2,232 €
1,945
807
+1,138 €
Net profit
(3,198)
848
-4,046 €
(4,667)
316
-4,983 €
Discontinued operations*
(12)
(102)
+90 €
(80)
(54)
-26 €
Adjustment Item MMFIN**
(6,636)
-
-
(6,636)
-
-
Net profit after discontinued
operations
(3,210)
746
-3,956€
(4,746)
262
-5,008 €
EBITDA margin Adjusted
4.7%
4.4%
4.1%
4.4%
3
The Group’s operating income amounted to EUR 168 million in 2023, which is a 20 % increase
compared to the same period last year, while the Company’s operating income amounted to EUR 122
million, which is a 22 % increase compared to the same period last year. Normalized EBITDA (operating
income - operating expenses + depreciation - normalization item) at the Group level amounts to EUR
7.8 million, which is a EUR 1.7 million increase compared to the same period last year mostly as a result
of increased activity and improved operating efficiency in the Company and Dalekovod OSO d.o.o.
Normalized Group’s EBITDA margin increased by 4.4 percent in 2022 to 4.6 percent in 2023.
Normalized EBITDA at the Company level amounts to EUR 5 million, which is a EUR 0.6 million increase
compared to the same period last year.
The net profit after discontinued operations of the Group in 2023 amounts to EUR -3.2 million, while
the net profit after discontinued operations of the Company amounts to EUR -4.7 million euro.
Positive indicators and operation recovery trends represent the basis for an optimistic look ahead.
4
Financial results of Group Companies
Dalekovod Group
Dalekovod Group
Dalekovod d.d.
(in 000 EUR)
2023
2022
Index
2023
2022
Index
ASSETS
137,929
129,642
106
121,716
120,446
101
Non-current assets
38,630
38,062
100
47,027
41,875
112
Current assets
99,299
91,580
108
74,689
78,571
95
Inventories
16,134
10,494
154
2,464
1,119
220
Trade and other receivables
70,571
76,997
92
61,759
74,411
83
Income tax receivable
243
289
84
204
204
100
Cash and cash equivalents
12,345
3,784
326
10,262
2,837
362
Assets held for sale
6
16
38
-
-
-
LIABILITIES
75,777
63,900
119
66,423
60,407
110
Provisions
3,875
3,400
114
3,480
3,157
110
Non-current liabilities
9,212
5,920
156
9,593
6,336
151
Borrowings
7,806
4,514
173
8,187
4,930
166
Deferred tax liability
1,406
1,406
100
1,406
1,406
100
Current liabilities
62,690
54,580
115
53,350
50,914
105
Borrowings
4,148
3,771
110
4,359
4,729
92
Trade and other payables
54,816
47,181
116
45,676
42,705
107
Income tax payable
3,685
3,509
105
3,315
3,480
95
Liabilities held for sale
41
119
34
-
-
-
EQUITY
62,152
65,742
94
55,293
60,039
92
Share capital
41,247
54,744
75
41,247
54,744
75
Capital reserves
12,387
-
-
12,387
-
-
Legal reserves
22
22
100
-
-
-
Treasury shares
(1,124)
(1,124)
100
(1,124)
(1,124)
100
Statutory and other reserves
5,453
5,759
95
1,124
1,124
100
Revaluation reserves
6,405
6,405
100
6,405
6,405
100
Translation reserves
(739)
(665)
111
-
-
-
Accumulated loss
(1,499)
601
(249)
(4,746)
(1,110)
428
5
The implementation of the recapitalization process has influenced the significant improvement of the
financial situation of the Group and Company. As already mentioned, based on the shareholders’
Decision to increase the share capital of the Company by EUR 54 million, i.e. 41,000,000 new ordinary
shares were subscribed, each in the nominal amount of 1.33 euro, increasing the Company share
capital to EUR 54,744,432.94. 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 by a pre-bankruptcy
settlement. The total amount of claims settled on account of the principal and interest at the Company
level was EUR 47 million which significantly improved the debt indicators and the Company’s and
Group’s overall financial position.
The increase of long-term liabilities compared to 31 December 2022 was most significantly affected by
the newly approved loan for fixed working capital in the amount of EUR 3.7 million; however, Group’s
and Company’s net financial debt decreased in relation to the beginning of 2023 due to the increase
in operating profitability and the cash position in the balance sheet. In February 2023, the regular
instalment for bonds issued was due, which decreased the bond liability compared to 31 December
2022.
Type of financial debt
Dalekovod Group
Dalekovod d.d.
2023
2022
Index
2023
2022
Index
Lease liabilities
4,699
4,180
112
4,604
4,051
114
Bonds
1,540
1,728
89
2,033
2,281
89
Bank loans
5,717
2,378
240
5,909
3,327
178
Total financial debt
11,956
8,285
144
12,546
9,659
130
Cash
12,345
3,784
326
10,262
2,837
362
NET financial debt
(389)
4,501
(9)
2,284
6,822
33
6
An overview of the business activities of the Group’s key segments
The segment of Energy projects implementation - construction of transmission lines and substations
recorded an increase in income of 19% in 2023 compared to the same period last year and total income
amounted to EUR 101 million. The profitability of the transmission line segment, although under the
influence of the value adjustment due to the dispute in Norway in the amount of EUR 1.1 million
increased significantly as a consequence of intense activity on current projects (especially in Sweden
and Croatia). Transmission lines are being constructed as part of 25 large projects (2 in Norway, 6 in
Sweden, 3 in the region, 1 in Germany and 13 in Croatia) as well as 16 smaller projects, and substations
as part of 9 projects (1 in Croatia, 2 in Norway, 5 in Macedonia and 1 in Ukraine).
The segment of infrastructural projects implementation recorded a 50% increase in income compared
to the same period last year, and total income in 2023 amounted to EUR 19 million. The sector
profitability is at the planned level. The most significant investors in this sector are HŽ Infrastruktura
and Hrvatske ceste. There are 18 ongoing projects, and works are taking place on 8 sites.
Two companies are undertaking projects in the Production segment - Dalekovod MK d.o.o. and
Dalekovod OSO d.o.o. In 2023, income generated by Dalekovod MK d.o.o. decreased by 4 percent
compared to the same period last year and amount to EUR 13,100 thousand. The reason for the
decrease is the impact of deferred activities on the projects in Croatia and Slovenia. On the other hand,
the additionally contracted works on the domestic and foreign market generated a positive effect and
a margin significantly better than planned, resulting in a significantly better EBITDA compared to the
same period last year.
In 2023, the company Dalekovod OSO d.o.o. produced/processed 1987 tons of equipment, which is a
40% increase compared to the same period last year. The increase in quantitative indicators is a result
of a very large number of entries in the book of contracted works which had a favourable effect on
income stability in the next period. The operating income of the company Dalekovod OSO d.o.o. in
2023 is consistent with the growth of production volumes: it increased by 37% compared to the same
period last year, accompanied with a significantly better EBITDA.
The achieved EBITDA of the production segment, that is, of both companies, is EUR 2.7 million, i.e. EUR
1.5 million more than in the same period of the previous year.
7
In 2023, the Engineering segment, which is related to the activities of the Dalekovod Projekt d.o.o.
company, generated income in the amount of EUR 5.7 million. A significant part of this income is a
result of activities on the foreign market, especially the Swedish one. Considering the cyclic nature of
engineering activities, the satisfactory level of profitability was preserved. The steady level of
contracted works ensures their execution in the upcoming period.
In 2023, Dalekovod Ljubljana d.o.o. generated an income of EUR 14.5 million, where the most
significant share of EUR 12.1 million pertains to income generated by the 110 Kv Divača-Pivka-Ilirska
Bistrica project. The continuation of the 110 Kv Divača-Pivka-Ilirska Bistrica project (Pivka-Ilirska
Bistrica section) ensured the realization in the next period when income is expected to increase. The
company’s EBITDA achieved in 2023 was HRK 338 thousand.
In 2023, Dalekovod Emu d.o.o, which operates on locations in Zagreb and Vela Luka, generated an
income of EUR 0.4 million. 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. EMF measurements, obligatory for companies with HF and LF radiation
sources, are performed on the entire territory of Croatia. 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.
In 2023, Dalekovod Mostar d.o.o. generated an income of EUR 11.4 million, which is an increase of 23
% compared to the same period last year. The company’s EBITDA amounts to EUR 492 thousand and,
according to the increase in income and relevant costs control, it is somewhat higher than in the same
period last year. The achieved income is a result of a high level of contracted works during 2022 and
2023 as well as accelerated realization of the projects contracted during 2022 and 2023, which is,
among other, a consequence of investments by both existing and new investors into RES.
8
*company subject to liquidation
Company name
Business revenue
Adjusted EBITDA
(in 000 HRK)
2023
2022
Index
2023
2022
Index
Dalekovod d.d.
122,353
100,641
122
(1,631)
4,434
-6,065 €
Dalekovod MK d.o.o.
13,100
13,694
96
798
598
+200 €
Dalekovod OSO d.o.o.
15,946
11,631
137
1,885
620
+1,265 €
Dalekovod Ljubljana d.o.o.
14,451
15,307
94
338
334
+4 €
Dalekovod Projekt d.o.o.
5,712
5,386
106
466
361
+105 €
Dalekovod Mostar d.o.o.
11,385
9,283
123
492
481
+11 €
Cinčaonica Usluge d.o.o.*
23
25
92
(12)
(102)
+90 €
Dalekovod EMU d.o.o.
430
487
88
14
60
-46 €
Other affiliates
20
52
38
(10)
22
-32 €
Elimination
(15,601)
(17,111)
91
(1,170)
(706)
-463 €
Total Group
167,819
139,395
120
1,170
6,102
-4,932 €
9
Strategy - business guidelines for future periods
Industry in which Dalekovod Group competes expects significant conjuncture in the future period due
to several key reasons: (i) relatively old transmission network requiring reconstruction; (ii) shift
towards renewable energy sources and the general trend of switching from energy produced from
traditional fossil fuels to electric energy from renewable sources; (iii) implementation of tenders
postponed in previous periods due to COVID 19 pandemic; (iv) although resolution to the Ukrainian
crisis is not likely soon, markets have adjusted and the situation does not negatively influence business
results.
Moreover, all markets where Dalekovod Group is conducting business (Croatia, Bosnia and
Herzegovina, Macedonia, Germany, Norway, Slovenia, Sweden and the Middle East) are experiencing
growth of business activities with expected continuation of strong investment momentum.
Therefore, Dalekovod Group‘ strategy of focusing on energetics, railway infrastructure and equipping
of tunnels on roads and motorways, but not neglecting other opportunities, is excellently positioned
in connection to relevant market circumstances.
High level of capitalization and working capital, organization of Group that achieves control of all
processes, from design, to purchasing and production of key components, to the construction itself
and the synergy that is achieved within Končar Group enable implementation of this strategy in an
efficient and sustainable way.
Dalekovod Group will continue significant investments in health and safety of its employees, as well as
material conditions and it will increase investments into sustainable development with the goal of
achieving balance between the environment, community and our activities in order to fulfil
requirements for development without endangering the prospects of future generations. Therefore, it
is important to emphasise that the projects that Dalekovod Group executes within energetics and
infrastructure domains directly contribute to the implementation of goals of green transition.
10
Dalekovod Group
Dalekovod Group (Group) on December 31 includes parent company Dalekovod d.d., Zagreb, and
thirteen daughter companies owned by the parent company and one company listed as joint venture
(2022: fourteen daughter companies owned by parent company and one company listed as joint
venture) - notes 20 and 21.
Dalekovod d.d., Zagreb (hereinafter Company) is established according to the laws and regulations of
the Republic of Croatia. Company seat is in Zagreb at address Marijana Čavića 4. Company shares are
listed at Zagreb Stock Exchange.
Primary Company activity is design, production, construction and installation of electric power
facilities, road, railway and city transportation facilities and telecommunication infrastructure.
Application of Corporate governance code
Given the fact that Company shares are listed on the official market of the Zagreb Stock Exchange,
Company applies the Corporate Governance Code of the Zagreb Stock Exchange and the Croatian
Financial Services Supervisory Agency (HANFA). Code is available on Zagreb Stock Exchange
(www.zse.hr) and HANFA (www.hanfa.hr) websites.
Pursuant to positive legal regulations, in 2023 Company has prepared the Statement on the application
of mentioned Corporate Governance Code that attests actions and development in line with good
corporate governance code in all business segments. Statement on the application of Corporate
Governance Code is published at Company website (www.dalekovod.hr), Zagreb Stock Exchange
(www.zse.hr) and HANFA (www.hanfa.hr) websites, where some issues of corporate governance are
differently defined than in Corporate Governance Code of Zagreb Stock Exchange d.d. and HANFA.
Exceptions and deviations from the Code are listed below.
Besides the Corporate Governance Code of Zagreb Stock Exchange and HANFA that is in force,
Company applies their own Code of Corporate Governance, advancing the standards for business
transparency that are in line with directives of the European Union. Codes of Corporate Governance
define the procedures for operation of surveillance boards, management and other bodies and
structures in charge for making decisions and ensuring avoidance of conflict of interest, efficient
internal control and effective accountability system.
Company has established Code of Conduct as the fundamental document establishing and promoting
organization values of Dalekovod Company and Group in whole, and promote socially responsible
business activities. Company has endorsed the Ethics code in business, initiated by the Croatian
Chamber of Commerce. By accepting the Ethics Code Company has accepted the obligation of acting
according to the principles of responsibility, truthfulness, efficiency, transparency, quality, acting in
11
good faith, respecting good business customs with business partners, business and social environment
and our own employees. Description of the fundamental elements of internal control and risk
management systems is important part of conducting business and their elements are listed below.
Structure and the work of the Management and Supervisory Boards, the method of operation of the
General Assembly and information on the holders of Company shares are part of the Statement on
corporate governance and are listed below. All listed documents are available at Company website
(www.dalekovod.hr).
Company follows recommendations of the Code, with the exception of those provisions whose
implementation at specific moment is not practical or foreseen given the applicable legal framework.
Such exceptions are:
- Supervisory Board has not given previous approval for conflict of interest policy that is not available
for free at company website (Article 7 of Code), given the fact that this is regulated by the Code of
Ethics, available at Company website. Adoption of Code of Conduct that shall define the policies for
management of conflict of interest is scheduled for 2024.
- Management and Supervisory Board members have no shares in competitor companies (Article 10
of Code).
- Supervisory Board did not formally designate goal percentage of female members of Supervisory and
Management Boards (Article 14 of Code), but all international and national standards for gender
representation and equality are directly implemented, and setting of a formal goal is scheduled for
2024.
- When nominating candidates for Supervisory Board to the General Assembly, materials for the
General Assembly include candidates’ resumes and they are available at website (Article 16 of Code).
- Most members of every committee of Supervisory Board are not independent (in line with definition
from Appendix A of the Code) given the fact that part of Supervisory Board members represent
significant shareholders (Article 27 of Code).
- Internal Company acts provide the obligation of delivery of all materials necessary for Supervisory
Board meetings and committees within Supervisory Board to its members at least five (5) days before
such meeting (Article 34 of Code).
- Internal Company acts include rules that regulate responsibilities and reporting procedures at the
level of a parent company, but not daughter company, but internal acts of daughter company regulate
responsibilities and reporting to members (Article 44 of Code).
- Obligations of members of Management Board described in Article 47 of Code are regulated by
individual agreements with each Board member.
- Compensation policy does not include circumstances described in Article 53 of Code.
12
- Compensation policy or company internal acts do not need to ban inclusion of variable elements or
other elements connected with the success of business activities into compensation of the Supervisory
Board, given the fact that Supervisory Board does not receive any compensation, except worker
representative, whose compensation is fixed.
- Provision of non-audit services by an auditor are addressed individually and are listed in the opinion
by the external auditor (Article 64 of Code).
- Company does not implement means of modern communication technology for participation and
voting at General Assembly (Article 79 of Code) because current voting method has proven in practise
as the optimal solution, mostly due to large number of shareholders with smaller number of shares.
Anti-corruption and anti-bribery actions
Members of managing bodies, employees and business partners are familiar with anti-corruption
policies and procedures and they respect principles of Code of Ethics in their business and everyday
activities. Company has the reputation of a loyal and fair business partner on the international market
and there are no noted cases of corruption on the level of Dalekovod Group.
Company did not provide any financial or non-financial contribution to political causes, directly or
indirectly, to a government or user. Company promotes and implements fair and transparent relations
of market competition in all business aspects, with all subjects and at all places. Dalekovod Group did
not note any behavior contrary to the principle of freedom of market competition and anti-trust and
anti-monopoly practices.
Corporate governance organization
In line with best practices Company strives to high standards of corporate governance and business
transparency as the only true way of conducting business and provides the basis for all business
activities of Dalekovod Group. The structure of corporative governance is based on a dualistic system
consisting of Supervisory Board and Management Board. Together with General Assembly, and in line
with the Statute and the Companys’ Act, Supervisory Board and Management Board present the three
fundamental bodies of the Company.
General Assembly
General Assembly is the body through which shareholders fulfil their rights within Company and which
represents the will of the shareholders, which represents the will of Company. General Assembly is
made out of Company shareholders. Method of work of General Assembly, its authorities, rights of
13
shareholders and the manner of their fulfilment are proscribed by Company Statute that is publicly
available at website (www.dalekovod.hr).
General Assembly is in charge of election and dismissal of members of Supervisory Board, passing
decisions on the use of profit, issuing release notes to members of Management Board and Supervisory
Board, appointing auditor, deciding on amendments to the Statute, increasing and decreasing share
capital and other issues that are part of its competence as per provisions of legislation.
One General Assembly meeting has been held in 2023. All decisions provided for in the agenda were
accepted on the meeting held June 12, 2023. General Assembly passed the decision on the granting of
release notes to members of the Management and Supervisory Boards of Company, decision on the
use of profit from 2022, decision on the appointment of auditor for 2023, decision on the
harmonization of share capital and nominal share value of Company due to switch to euro as the
official currency in the Republic of Croatia, decision on the amendment of the Statute and it approved
the Report on compensation for members of Management and Supervisory Boards for 2022. All
decision from the General Assembly session were published in line with legislation at Company
(www.dalekovod.hr), Zagreb Stock Exchange and HANFA websites, including the results of voting.
Supervisory Board
In line with the current Corporate Governance Code of the Zagreb Stock Exchange and HANFA,
Supervisory Board is mostly constituted by members who are not independent, i.e. they represent
majority Company shareholders.
Supervisory Board has seven members, five of which General Assembly elects and dismisses, one
representative is elected by the employees in line with provisions of the Labour Act and one
representative is appointed by shareholder NAPREDNA ENERGETSKA RJEŠENJA d.o.o. in line with the
Companies’ Act (Article 256).
Supervisory Board is responsible for surveillance of Company business management, the
representation of Company towards Management and the decision making on issues that do not fall
into the domain of General Assembly. The immediate company management is not performed by
Supervisory Board, but it instructs Management Board in making strategic decision and setting up
management framework. Company Statute provides additional authorizations to Supervisory Board
and it also defines how certain types of work can be done only with prior consent from the Supervisory
Board. At least four times a year (more frequent, if necessary), members of Supervisory board at
14
sessions discuss company strategy and business plan. Supervisory Board acts exclusively jointly as
managing and supervisory body, and subcommittees with special duties are appointed.
Members elected by the General Assembly elect among themselves the chairman of the Supervisory
Board. Members elected by the General Assembly elect among themselves deputy chairman. Mandate
of members of the Supervisory Board is four years and the same persons can be re-elected.
According to the decision of the Company's General Assembly from June 30, 2022, the members of the
Supervisory Board (including the chairman and deputy chairman) are not entitled to compensation for
their work, except for the member of the Supervisory Board who is the representative of the workers
and who is entitled to compensation in the monthly gross amount of 530.89 euro. Report on the
compensation of the Management and Supervisory Boards has been composed in line with Article 272
of the Companies Act and adopted Compensation Policy and it will be forwarded to General Assembly
for adoption.
Members of the Supervisory Board during 2023:
Gordan Kolak – Chairman of Supervisory Board
Josip Jurčević - Deputy Chairman of Supervisory Board
Dražen Buljić - Member
Josip Lasić - Member
Božidar Poldrugač - Member
Damir Spudić - Member
Pavao Vujnovac – Member
General Assembly has held 57 meetings of Supervisory Board in 2023. Quorum for Supervisory Board
meetings is at least half of elected members of Supervisory Board and a member of the Supervisory
Board appointed by the company NAPREDNA ENERGETSKA RJEŠENJA d.o.o.
All members have participated in decision making at all meetings in 2023. In case of not being able to
attend meetings, absent members participated in the work of Supervisory Board via video-conference
platform or in writing in line with the Rules of procedure of the Supervisory Board.
Management and Supervisory Boards work closely for the benefit of the Company and Dalekovod
Group, via meetings but also through other communication channels when need for them exist.
Management Board has regularly notified Supervisory Board on all important business events, course
of business, income and expenses and general state of the Company and Dalekovod Group.
15
Management Board has submitted to the Supervisory Board quarterly, semi-annual and annual written
reports on business activities in line with statutory deadlines, and Supervisory Board had no comments
to such reports that were unanimously adopted. Moreover, Management Board has informed
Supervisory Board on corporative strategy, planning, business events, risk management, compliance,
all deviations of business events from original plans and assessments, as well as important business
transactions that include Company and Dalekovod Group.
Supervisory Board has conducted self-assessment of profiles and competences of Supervisory Board
members and members of its committees. Self-assessment was conducted by the chairman of the
Supervisory Board with the help of suitable committees, without hiring an external auditor.
Supervisory Board operates at optimal number of seven members so its members, in total, possess the
knowledge, competences and professional experience necessary for correct performance of its tasks,
taking into consideration the aspect of diversity. Assessment of Supervisory Board members and its
committees has confirmed that each individual makes an effective contribution, showing his/her
dedication to the role and dedicates time to performing that duty.
Administrative support for preparing meetings of Supervisory board is provided by the Company
secretary in an efficient and in due time manner. Supervisory Board supports the aspect of diversity
together with, above all, the necessary expertise of candidates when proposed for appointment to
Company Supervisory Board.
Report on the performed supervision in business year 2023 prepared for voting at General Assembly
includes the following:
- method how and to what extent Supervisory Board has performed supervision of Company
management in business year 2023
- results of inspection of annual financial reports on December 31, 2023
- auditor report
- results of inspection of Management Board report on the state of business in business year
2023
- results of inspection of report on relationships with the one in control and related companies.
Committees of Supervisory Board
Three committees operate within Supervisory Board that support the activities and operation of
Supervisory Board with their work. Auditing Committee, Appointment and Remuneration Committee
and Corporate Management Committee. All committee members are appointed among members of
the Supervisory Board.
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Auditing Committee
Analyses financial statements in detail, provides support to the Company's accounting and establishes
good and high-quality internal controls in the Company. Monitors the integrity of financial information,
especially the accuracy and consistency of the accounting methods used by the Company and the
Dalekovod Group, including the criteria for consolidation of financial reports of companies belonging
to Dalekovod Group. Moreover, the task of the Committee is to monitor the quality of the internal
control and risk management system, with the aim of adequately identifying and publicly announcing
the main risks to which the Company is exposed and managing them appropriately.
Chairman of the Auditing Committee is Josip Lasić and members are Josip Jurčević and Damir Spudić.
Auditing Committee has held 4 meetings in 2023. All members of Auditing Committee have
participated in the decision making at all meetings. Discussions and decisions were made at meetings,
and pursuant to them, recommendations to the Supervisory Board were provided, on the reports on
the implementation of the annual internal audit plan, the implementation of the policy on the
provision of non-audit services for 2023, the supervision of the implementation of the statutory audit
and the consolidated and non-consolidated annual financial statements for 2023, making
recommendations for the adoption of those reports and appointing auditors for the year 2023.
Auditing Committee is independent in its work and most members of Auditing Committee are experts
in accounting and auditing.
Committee for appointment and remuneration
Committee is in charge for the discussion and recommendations to the Supervisory Board on the
appointment and election of Management Board members, as well as the structure of their
remuneration. Chairman of the Committee is Gordan Kolak and members are Josip Jurčević and Pavao
Vujnovac. All members of the Committee are members of the Supervisory Board. Committee has held
1 meeting in 2023 and all members have attended.
Committee for corporate governance
Mission of the committee is providing support to Supervisory Board for the implementation and
upgrade of strategy of corporate governance in the Company and the Dalekovod Group. Chairman of
the committee is Josip Jurčević and members are Božidar Poldrugač i Josip Lasić. All members of the
Committee are members of the Supervisory Board. No meetings of the committee were held in 2023.
17
Management Board
The role of the Management is running the business of the Company in line with the Companies’ Act,
Company Statute and internal regulations of the Company. The Management Board is obliged to
perform its function with the attention of an orderly and conscientious businessman, taking into
account the interests of the Company and its shareholders.
Management Board is the main body that runs the overall business at its own responsibility and it
appoints and recalls the Supervisory Board. The scope of activities of Management Board members is
set according to business areas, i.e. activities and processes. Management Board is responsible for
quality management of business risks and during regular meetings check economic, environment and
social influences of the Company and the Dalekovod Group.
At regular meetings Supervisory Board assesses and evaluates the performance of the Company
Management Board based on indicators of business performance and maintenance and establishment
of the Company's positive reputation.
By way of committees and other set regulations Management Board members coordinate, direct,
supervise and keep track of work within dependent companies of Dalekovod Group. Members of
Management Board do not receive any compensation for their work within company bodies of the
Dalekovod Group.
Supervisory Board has assessed that the Management Board and Supervisory Board have sucessfuly
cooperated in 2023 in the interest of the Company via regular contacts. Management Board has
regularly notified Supervisory Board on all more important business events, course of business, income
and expenses and general state of the Company. Management Board has submitted to the Supervisory
Board quarterly, semi-annual and annual written reports on business activities and Supervisory Board
had no comments to such reports that were unanimously adopted. Management Board regularly
informs Supervisory Board on corporative strategy, planning, business events, risk management,
compliance, all deviations of business events from original plans, as well as important business
transactions that include the Company and Dalekovod Group. Management regularly submits to
Supervisory Board reports prescribed by legislative and Management informs Supervisory Board
between meetings on important events pertaining to the business of the Company.
Individual self-assessment of the Management Board work is an integral part of the annual process of
effect management and assessment management of Board members. Additionally, in line with
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Companies’ Act, General Assembly approves the method how Management Board runs Company
business, by giving release notes for previous business year.
According to Statute, Management Board can consist of four members. Meeting held 31.12.2023 has
three members. Mandate of Management Board members lasts for five years with the possibility of
re-appointment, without limitation to the number of mandates. Each Board member conducts
business affairs within his/hers scope independently and on his/hers own responsibility with the
attention of an orderly and conscientious businessman and makes decisions exclusivelly in the interest
of the Company. When the decisions are made on key issues of business policy or issues that intrude
into the fields of other Board members, Board member is obliged to submit such issues for decision to
the entire Management Board.
Agreement on the performing duties as member of the Managing Board also defines the rights and
obligations of Board members according to the performance of the duties of Board members. Report
on remuneration of the Management and Supervisory Boards includes data on the amount of
compensation of Management Board members and it is composed in line with Article 272 of the
Companies ' Act and adopted Compensation Policy and it will be forwarded to General Assembly for
adoption.
Members of the Management Board who have performed this duty during 2023:
- Tomislav Rosandić, Chairman of Management Board from 1.1.2023 to 31.12.2023,
- Eugen Paić-Karega, member of Management Board from 1.1.2023 to 31.12.2023,
- Tvrtko Zlopaša, member of Management Board from 1.1.2023 to 31.12.2023,
- Ivan Kurobasa, member of Management Board from 1.1.2023 to 31.03.2023.
Company Management Board has held 109 meetings in 2023. All members of Management Board
were present at all meetings. In case of not being able to attend meetings, absent Board members
participated in meetings via video-conference platform and they have actively participated in
Management Board work and making decisions.
Internal audit
The Company has commissioned Internal audit department of company Končar - Elektroindustrija d.d.
for conducting an independent audit and control within the Company. Internal audit informs the
Management, Supervisory Board and Auditing Committee through comprehensive reports on the
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performed audit (findings and suggestions for improvement). Internal audit charter defines the
framework and main principles applied for internal auditing of the Company and Dalekovod Group.
Internal audit is responsible for the assessment of the level of risk management in business processes,
the revision of efficiency of the internal control system with the aim of the advancement of risk
management and compliance with procedures, testing and analysing compatibility of existing business
systems with adopted policies, plans, procedures, laws and rules that might have significant influence
on business reports.
Internal audit is in charge of giving recommendations for preventive measures in the field of financial
reporting, compliance of business and control with the aim of eliminating the risk and possible
shortcomings that may lead to process ineffectiveness or fraudulent procedure. Internal audit informs
Management Board, Auditing Committee and Supervisory Board of its work and audit plan. Findings
and recommendations help management to improve processes, preventively eliminating potential risk
or reducing risk to an acceptable level.
Several audits have been conducted in 2023 within the areas of reporting, purchasing and fulfilment
of projects.
Overview of the findings and recommendations presents in more detail all findings and
recommendations for all conducted audits with deadlines and status. Report on conducted audits has
been adopted by the Auditing Committee.
Employees
An important determining characteristic of the Company is the creation of a knowledge-based
company built on the overall intellectual capital. Due to increased demands for competitiveness,
professional development of employees and efficient management of human resources is among the
priorities of the organization. By managing labour relationships and internal organization, the
Company and companies within Dalekovod Group respect regulations in force, collective and individual
agreements and protect human and civil rights, dignity and reputation of every employee.
The Company organized business in such a way that it respects and applies in its work provisions of
the Constitution, legislation and other regulations, bylaws and internal acts of the Company. It
continuously familiarizes workers with all relevant provisions and regulations pertaining to their rights
and obligations at work, fights against all forms of irregularities and tries to prevent all forms of
irregularities.
20
The Company promotes equality of all workers, regardless of gender, age, nationality, ethnic
background, rase, religion, language, social and economic status, sexual orientation, affiliation with
political and other organizations.
No case of discrimination based on rase, skin colour, gender, religion, political beliefs, national or social
background have been noted. As per Collective agreement, employer is responsible for the protection
of dignity of workers during work activities and to ensure work conditions in which he/she shall not be
exposed to harassment or sexual harassment by the employer, manager, co-workers or other persons
with which they regularly come into contact during work activities.
Description of products and services
Dalekovod d.d. has specialized itself for the implementation of contracts per „turnkey“system within
the following fields:
• electric power facilities, especially transmission lines from 0.4 to 750 kV
• substations of all levels and voltage levels up to 500 kV
• air, underground and underwater cables up to 110 kV
• telecommunication facilities, all network and antenna types
• production of suspension and jointing equipment for all types of transmission lines and substations
from 0.4 to 750 kV
• production and installation of all metal parts for roads, especially road lighting, protective fencing
and traffic signalization, tunnel lighting and traffic management
• electrification of train and tram tracks
21
Own shares
Company has not acquired its own shares in 2023.
Investment into dependent and associated companies and joint ventures
Investments into dependent companies are shown in more detail as part of note 20 of financial reports.
Investments into associated companies are shown in more detail as part of note 21 of financial reports.
Events after balance sheet date
Mr. Tomislav Rosandić is no longer chairman of Management Board from March 31, 2024 and Mr.
Eugen Pajić-Karega steps into this position, forming a two-party Company Management with Mr.
Tvrtko Zlopaša.
Company Proizvodnja MK d.o.o. has changed the name to Dalekovod MK d.o.o. On January 18, 2024.
On January 18, 2024, the share capital of Dalekovod MK d.o.o. of EUR 26,109,151.24 (HRK 196,719,400
at the fixed conversion rate of 7.5345) was adjusted to EUR 26,109,150.00.
Follow-up to the first-instance verdict in favor of the Ministry of Finance/Republic of Croatia in the
court case that the Company is conducting before the Commercial Court in Zagreb under business
number P-2053/2018 against the Ministry of Finance/Republic of Croatia for the payment of the
Company's claim in the amount of EUR 6,636,140.42 ( 50,000,000.00 HRK) and the filing of a legal
remedy against the said verdict, on March 25, 2024, the Company received a decision of the High
Commercial Court of the Republic of Croatia, which annulled the first-instance verdict and returned
the case to the Commercial Court in Zagreb for a new decision.
There are no major changes in comparison to 31 December 2023 and the reporting date.
Goals and policies connected to management of financial risks and capital risk
Company and Group are exposed to market, price, credit and solvency risks that are described in detail
together with management of capital risk in note 3 of financial reports.
22
Shareholders structure (on 31 December 2023)
In line with Company Statute, the shareholders right to vote is not limited to a certain percentage of
number of votes, nor are there time limitations for exercising the right to vote. Every regular share
gives the right to one vote at General Assembly.
Rights and obligations of the Company arising from the acquisition of own shares are implemented in
line with provisions of the Companies’ Act and the Company Statute.
SUBJECT
NUMBER OF SHARES
Napredna energetska rješenja d.o.o.
31,000,000
Financial Institutions
9,144,753
Foreigns
3,928
Individuals
463,956
Own shares
988
Others
633,568
TOTAL
41,247,193
23
Affiliated companies and subsidiaries
THE REPUBLIC OF CROATIA
1. DALEKOVOD MK d.o.o., Vukomerička 9, 10410 Velika Gorica 79970472123/ 080437239
2. DALEKOVOD 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. EL-RA d.o.o., Vela Luka (Municipality Vela Luka) 30113948970/ 060033055
6. CINČAONICA USLUGE in liquidation d.o.o. 90304389514/ 081231295
Company Proizvodnja OSO d.o.o. has changed the name to Dalekovod OSO d.o.o. on December 22,
2023.
Company Dalekovod OSO d.o.o. has been sold by company Dalekovod MK d.o.o. to company
Dalekovod d.d. on 27 December 2023.
On December 22, 2023, the share capital of Dalekovod OSO d.o.o. of EUR 2,982,852.21 (HRK
22,474,300.00 at the fixed conversion rate of 7.5345) was adjusted to EUR 2,982,840.00.
Company Proizvodnja MK d.o.o. has changed the name to Dalekovod MK d.o.o. on January 18, 2024.
On January 18, 2024, the share capital of Dalekovod MK d.o.o. of EUR 26,109,151.24 (HRK 196,719,400
at the fixed conversion rate of 7.5345) was adjusted to EUR 26,109,150.00.
COMPANIES OUTSIDE THE REPUBLIC OF CROATIA
7. DALEKOVOD Plt, Namibia
8. DALEKOVOD TKS a.d., Doboj, BiH (in bankruptcy proceedings, wrote off in 2019)
9. DALEKOVOD MOSTAR d.o.o., BiH, Ante Starčevića bb, Mostar, BIH Uniqe no: 4227105910001
10. DALEKOVOD LJUBLJANA d.o.o., Zavetiška ul. 1, 10000 Ljubljana, SLO, SI 28940024
11. DALEKOVOD UKRAJINA d.o.o., Ukrajina, 4 Lunacharskogo str. 02002 Kiev, The Ukraine, ID no.:
36683014
12. DALEKOVOD LIBYA za inženjering, joint company, Libia
13. DALEKOVOD NORGE AS, Norway, Sandviksveien 26, 1363 Høvik, Norway, ID no.: 998628253
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AFFILIATES AND REPRESENTATIVE OFFICES
14. DALEKOVOD NUF, Norway, Sandviksveien 26, 1363 Høvik, Norway
15. DALEKOVOD Skopje, 50te Divizije br. 36, Skopje-Centar, Skopje, Macedonia
16. DALEKOVOD NJEMAČKA, Germany, Steistr. 28, 40210 Dusseldorf
17. DALEKOVOD UKRAJINA - representative office in the Ukraine, 4 Lunacharskogo 02002 Kiev, the
Ukraine
18. DALEKOVOD - Branch Of Kosova, Kosovo, St. Garibaldi 3/7, 10000 Prishtine, Kosovo
19. DALEKOVOD D.D. - representative office in Sweden, c/o Amesto Accounthouse AB,
Roselundsgatan 54, 118 63 Stockholm, Sweden
20. DALEKOVOD D.D. Zagreb – affiliate Mostar, Ante Starčevića bb, 88000 Mostar
21. DALEKOVOD, d.d., affiliate Ljubljana, Zavetiška ulica 1 , 1000 Ljubljana
25
SOCIAL RESPONSIBILITY
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 Report on socially responsible business activities (DOP Report) that Dalekovod compiles every
year, refers to the period from January 1 to December 31, 2023, and it includes detailed information
on that business segment.
Report on socially responsible business activities will be available in June 2024. The integral part of the
Report will be the Company obligation pursuant to delegated acts of the European Union, Article 11,
paragraph 3 (EU Taxonomy).
Report is compiled by Dalekovod Group and includes four companies that form a group for which
parent company has the dominant influence. Previous report was published in 2023 (for calendar year
2022) and it is available at website https://www.dalekovod.hr/drustvena-odgovornost.aspx.
Responsible person for issues regarding the report and its contents is the head of Office for corporate
communications. Dalekovod Group has chosen the option of fundamental compliance with GRI
standards of the Global reporting initiative. Report has not been subject to external evaluation.
Dalekovod Group shall, until the next report, continuously improve existing practices and monitor the
progress of all companies that make up the group, as well as relations with shareholders, and that they
will report to the public about this in the next report and consider the option of external evaluation.
Organizational profile
Report on social responsibility was prepared by Dalekovod Group, even though the group in such form
is not registered as a legal entity. However, since the company Dalekovod d.d. is the signatory of the
UN Global Compact agreement, we believe that the company Proizvodnja MK d.o.o. should also be
taken into account. (from January 2024 Dalekovod MK d.o.o.), Proizvodnja OSO d.o.o. (from January
2023 Dalekovod OSO d.o.o.) and Dalekovod Projekt d.o.o. when it comes to the processed indicators,
because together they form a whole in the design, production and construction of transmission lines,
and with their reports and environmental indicators, they have a significant impact on the Group's
sustainable operations.
Dalekovod Group constantly works on improving its business practices and oversees work of
companies forming the group.
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Supply chain
Almost all of our suppliers from the previous year are from the territory of Europe, which is
understandable given the fact that all our projects last year were in Europe. In cooperation with
suppliers, we pay special attention to the following standards:
• ISO 9001 – constant product quality improvement and process management
• ISO 14001 – environment management
• ISO 45001 – health and safety management system
• ISO 50001 – energy management system
All procedures for all business processes, as well as for purchasing process of Dalekovod Group, are
defined pursuant to those standards. Part of implementation of these business procedures includes
the compilation of the list of suppliers. The method for compilation of the list of suppliers is determined
by internal procedures, but its key part is the screening of new suppliers via a questionnaire and visiting
larger new suppliers by employees of our quality control department.
Long-standing suppliers on supplier list are assessed at the end of every year by assessing the quality
and compliance with delivery deadlines.
Given the fact that Dalekovod Group’s primary activity is design, manufacture and engineering,
supplier profession can significantly change from year to year, depending on the projects planned for
a specific year and purchasing process starts in the phase of compiling offers for projects when
potential suppliers and conditions for the offer are defined, and at that moment investors often
determine several suppliers in tender documentation whose equipment must be used when executing
the project. In case of projects won through tenders, agreement is signed with the best equipment
suppliers for each individual project.
Annual agreements with suppliers are signed in many areas for advance purchases that will be
repeated regardless of the projects themselves. Other annual agreements are connected with services
and specific materials that are purchases regardless of the projects themselves.
Memberships in associations
Dalekovod is a member of the following associations for the purpose od fulfilling more encompasing
goals:
• Global Compact
• Committee for socialy responsible business at the Croatian Chamber of Commerce
• American Chamber of Commerce in Croatia - AmCham Croatia
• Nordic Chamber of Commerce in Croatia
27
Dalekovod, as a group, as individual company or its employees are members of the following
organizations in Croatia and abroad:
• Croatian exporters
• Croatian Chamber of Commerce
• CIGRE (International council for large energy systems) Conseil International des Grands Réseaux
Électriques)
• HO CIRED (Croatian branch of the International conference on electricity distribution)
• MIPRO (Croatian Society for Information, Communication and Electronic Technology)
• IEEE (Institute of Electrical and Electronics Engineers)
• PMI (Project Management Institute)
• Croatian Standards Institute
• Croatian society for the technique of welding
• Croatian society for quality
• Croatian employers’ association
• Croatian chamber of architects and civil engineers
• Association of metal production and metal products
• Association of production of electric and optical equipment
• Energetics association - Society of renewable energy sources
• HED (Croatian energy society – Member of World Energy Council)
Thanks to memberships in the aforementioned associations, experts who work for Dalekovod d.d.
participate in professional meetings in Croatia and abroad and every year contribute their own papers
describing the methods, solutions and products of Dalekovod d.d. By providing sponsorships and
through active participation in the preparation and organization of meetings held in Croatia, Dalekovod
d.d. directly supports the work of professional organizations and considers them an important place
for promotion one's own knowledge and exchange of experiences with other experts.
Research and development activities
Focus on investors and partners and the continuous innovations are the values of the Group that form
the foundation for activities of market research and development of new products. We regularly
conduct market research activities with the aim of better understanding the needs of the market and
creating services and products that will meet all challenges. Simultaneously, we monitor trends and
28
activities on highly developed markets with focus on Scandinavia and with the potential of expanding
outside of Europe.
Involvement of stakeholders
Internal stakeholders are employees, other workers hired on projects including the process of
production through agencies and subcontractors and their associations. External stakeholders are
customers, local communities, shareholders, investors and suppliers.
Group members often act within a consortium that are organized for specific projects and as a
consequence this can lead to reduction in direct company contact with customers and/or community.
Therefore, key stakeholders, in addition to customers, can be considered employees (including
employee associations), suppliers and the public sector (who acts two-fold as contractor and regulator
to conditions of business dealings). Key stakeholders were determined by analysing business processes
and the circumstances and risks brought about by relations with individual stakeholders.
Communication with key stakeholders is maintained continuously at meetings and during the process
of business implementation and their legitimate interests are always taken into consideration.
Dalekovod key stakeholders are customers, suppliers, employees and shareholders. Communication
with all of them depends on key issues and interests. Besides the usual reporting system,
communication for all relevant business activities (e-mail newsletters, website, stock exchange reports
and media reports) takes place through other methods, depending on the need. Main topics in the
previous period were connected with the process of company restructuring, key investment projects
and business results with shareholders and important contracts in Croatia and abroad.
Communication with employees is done through e-mail: svi@dalekovod.hr ; svi_projekt@dalekovod.hr
; svi_mk@dalekovod.hr i svi_oso@dalekovod.hr, and mobile application for internal communication
„Jenz“ through which all relevant information in connection with the business of the company are
available to employees. Websites are important means of communication with partners in the country
and abroad, but also with the public in general. We utilize the following websites:
www.dalekovod.com, www.dalekovod-proizvodnja.com, www.dalekovod-projekt.com.
That is the reason why great care should be given to that form of communication whose goal is to
publish timely and accurate information suitable for specific type of media. In line with marketing
requirements and needs, websites of Dalekovod d.d. and all listed companies making out the
Dalekovod Group are translated into English. Content of our main website www.dalekovod.com is
partially available in Norwegian and Swedish.
Key topics arising from the communication with stakeholders include future company development
and safety of work positions, professional development of employees, fulfilment of growing market,
environment and regulatory standards that are valid on various (especially international) markets.
29
Environmental management
Dalekovod Group has decided on sustainable development by achieving balance between the
environment, society and our activities in order to fulfil requirements for development, without
endangering chances of future generations. Sustainable development, transparency and conformity
are components of economic growth of Dalekovod.
Promoting environmental management
• Dalekovod Group believes that environmental management is one of the main responsibilities of the
highest management and it promotes environment protection activities in line with economic
activities.
• Dalekovod Group keeps track, measures and analyses achieved results in order to determine the
goals in relation to reduction of influence on the environment and prevention of pollution.
• Dalekovod Group tries to continuously improve environmental management by conducting internal
audits.
• Dalekovod Group fulfils all legislative provisions, investor requirements and its own instructions
pertaining to the environment.
• Dalekovod Group tries to stay open in communication with the local community and interested
parties and to transparently report on its influences on the environment.
• Dalekovod Group strives to raise awareness for environmental protection through continuous
employee education.
• Dalekovod Group acts on the global level and accordingly promotes activities of environmental
protection in all activities of Dalekovod Group.
Employment relations, decent work and human rights
The dimension of social sustainability concerns the impact of organizations on the social systems in
which they operate. In this report, that impact is listed by segments of employment relations, decent
work and human rights, society and product responsibility. Important strategic guidelines of the
company Dalekovod d. d. direct the development of the Dalekovod Group towards the creation of a
company of knowledge based on the quality of human resources and total intellectual capital.
As the result of increased demand for competitiveness, employee professional development and
efficient management of human resources is considered as the greatest priorities of the organization.
When determining working relations and internal organization members of Dalekovod Group act in
30
line with applicable legislation, collective and individual agreements and protect human and citizen
rights, dignity and reputation of every employee. Discrimination or harassment of employees based
on their gender, rase, religious, national or political orientation, physical deficiencies, age, family
status, personal characteristics or beliefs are not permitted. The principle of equal compensation for
equal work is applied throughout the entire organization. Dalekovod d.d. ensures safe working
conditions, which imply minimal differences in the field of health and safety, appropriate training and,
if necessary, insurance against the consequences of such risks.
The freedom of association and collective negotiations are not restricted, and the rights guaranteed
by the collective agreement are broader than legal rights and above average in the industrial sector.
In case of violation of legal or contractual rights, employee or associate can request solution to the
problem and protection of his/hers rights. A person with permanent or temporary special
requirements for the duration of the employment status or during performance of work obligations
has to right to equal treatment, but his/hers special requirements must be taken into consideration.
Office for legal and personnel affairs is responsible for hiring. Joint policy that is in line with Dalekovod
d.d. (parent company) policy is applied.
Hiring and structure of employees
People employed for an indefinite time work in representative offices and affiliates abroad, depending
on the needs. Local work force when construction sites are in question depend on the requirements
for construction of larger project in more distant areas and employment is temporary. In Scandinavian
countries, where Dalekovod has the largest presence, local management with the knowledge of local
language is employed and the aim is on the further development of such market.
The trends present in the workforce segment indicate that the inflow is mainly related to the recent
employment of younger, highly educated staff, but also employees with specialist knowledge
(electrical fitters, locksmiths, carpenters) as the result of the needs in construction site areas, while
the outflow of the workforce is mainly related to the retirement of employees.
Employees of company Dalekovod d.d. are employed for indefinite time for full-time working hours.
Workers employed for definite time for the duration of the agreement exercise the same rights as
people employed for indefinite time in line with applicable legislation.
31
Collective agreements and employee rights
First collective agreement was made on 14 June 1996 with the Union of metal workers of Croatia -
Affiliate Velika Gorica, the Union of construction of Croatia - Union affiliate Dalekovod, Croatian
association of unions and the Union affiliate Dalekovod, and it applies to all employees. Collective
agreement has been revised several times. Last amendments were made in September 2023. Notices
concerning significant changes in business activity are issued in line with the Labour Act, and are not
specifically stated in the collective agreement. Notices concerning significant changes in business
activity are given to the workers’ council or, if council is not established in a specific company, to the
main union representative.
Health and safety at work
Aware of the dynamics of a construction site and the wide range of risks, Dalekovod has defined the
policy of the health and safety at work management system, which applies to employees,
subcontractors, visitors, associates, citizens and other stakeholders of work processes, and which is
based on the principle of proactive and preventive action with the aim of eliminating and replacing a
way of work that carries too much residual risk.
Higher standards for health protection and safety of workers has been set by implementing
management system ISO 45001 In accordance with the system management policy, the highest priority
is given to the principles of preventive action, first of all through the development of a culture of safety
at all levels, with the aim that all employees actively participate in ensuring a healthy and safe working
environment.
The health and safety management system is managed by occupational safety experts who, in addition
to higher professional education, also have significant experience on domestic and foreign projects.
This availability of staff enables better and more efficient supervision, which is an important factor,
considering the distribution of both projects and construction sites within them.
Practice has shown that the experience gained on transmission line construction projects qualifies our
construction projects as extremely successful in terms of safety and occupational health, as evidenced
by acknowledgements and awards from investors.
Training and education
Members of the Dalekovod Group continuously work on professional and personal development of
employees from the moment of their employment. Interns who start work after training are
introduced to jobs and work tasks within the company that employs them.
32
In addition to basic familiarization with the organization, the entire production program, references,
market activities and promotion, social responsibility and other activities at Dalekovod d.d., interns
also visit other locations of the group and learn about their production processes. Employee training
and their development are important tasks of the Human resources department. Quality, frequency
and selection of a suitable time for training and development of employees have important effect on
the sustainability and competitiveness of company.
Training programs are aimed at adapting to the company's requirements and are becoming
increasingly complex and include the necessary qualifications for current jobs (for example, training
for an overhead crane operator, operating a chainsaw or rotary tools), the possibility of expanding
knowledge regarding the tasks that the employee performs - additional training and the possibility of
advancement of motivated and capable individuals.
The education program adapted to the needs of employees is divided into several forms of training:
acquisition of computer skills, acquisition of knowledge of foreign languages, professional exams,
various trainings (various professional seminars, manager education programs, undergraduate studies,
graduate studies and doctoral studies).
In addition, the Human resources department encourages the learning and improvement of
knowledge of foreign languages, which is organized in accordance with the requirements of work
positions, therefore languages are also learned depending on the needs of certain markets, such as
the Norwegian market, and depending on the need to learn other Scandinavian languages.
According to the Occupational Safety and Health Act, a certain number of employees must be trained
to provide first aid. For every 50 workers one worker is trained to provide first aid. Therefore, it should
be noted that due to the well-organized system of safety and protection at work, as evidenced by the
small number of injuries at work and cases of professional incapacity, there is no need for additional
counselling on risks, prevention and control.
Communication with employees is two-way, team, department and supervisor meetings are regularly
held, but it is also conducted via e-mail svi.dd@dalekovod.hr, through a spokesperson, Jenz app, mail
newsletter and by publishing various decisions and notices.
Diversity and equal possibilities
The ratio of the basic salary of men and women according to the category of employees: The basic
salaries of men and women are identical in all categories of employees.
Company has actively implemented measures for promotion of gender equality on the level of the
Company during 2023. The emphasis was on equal conditions with regard to gender and age when
carrying out new employment, as well as redistributing worker internally.
33
The same criteria were applied when hiring workers for management positions in the Company, for
which continuous progress is achieved. Moreover, no recorded differences in wages for the same work
or work of equal value.
At all levels, an equal representation of experts was recorded, regardless of gender and age. Regarding
the professional criteria, the Company applies the strategy of employment and development of
management functions of the appropriate profession and level of education, considering the nature of
the function and its requirements. The company also continuously conducts employee educations and
trainings for the purpose of further improvement and development of competencies.
Human rights
No cases of discrimination on the basis of gender, rase, age, nationality, political or religious beliefs or
other applicable criteria have been recorded. Principles of equality and uniform criteria are respected
when managing human potential and making other relevant business decisions.
Freedom of association and collective negotiation
Within all companies of the Dalekovod Group and in all business activities, there is freedom of
association and collective negotiation. No cases of its limitations have been recorded. The same applies
to business activities outside Croatia.
Child labour, compulsory and forced labour
Dalekovod d.d. operates in compliance with positive legal regulations prohibiting child labour.
Dalekovod d.d. operates in compliance with the Constitution and positive legal regulations prohibiting
forced or compulsory labour.
Donations and sponsorships
In accordance with its development strategy as a socially responsible company, Dalekovod d.d.
Zagreb has been active for years in the field of sponsoring science and education, culture and art,
sports, sustainable development and health. Also, the company has an influence on humanitarian
activities. Our goal is to create a knowledge society and create prospects for young people.
34
Dalekovod Dioničko društvo za inženjering, proizvodnju i izgradnju
(Dalekovod Joint stock company for engineering, production and construction)
Marijana Čavića 4, 10 000 Zagreb, Croatia,
10001 Zagreb, PO Box: 128
URL: www.dalekovod.hr, www.dalekovod.com
E-mail: dalekovod@dalekovod.hr
Share capital: 41,247,193.00 EUR Number of shares: 41,247,193
IBAN: HR8323600001101226102 ZABA Zagreb
Company registration no.: 080010093, Commercial Court in Zagreb
Registration no: 3275531
Company ID no. (OIB): 47911242222
Activity code: 4222 (Construction of electricity and telecommunications lines)
Signed by Management Board on 12 April 2024.
Eugen Paić-Karega Tvrtko Zlopaša
Chairman of the Management Member the Management Board
35
RESPONSIBILITY FOR CONSOLIDATED AND NON-CONSOLIDATED ANNUAL
REPORT
The management of the company Dalekovod d.d., Zagreb, Marijana Čavića 4 (the "Company") and its
subsidiaries (together "Group") is obliged to ensure that the annual non-consolidated financial
statements of the Company and the consolidated financial statements of the Group for each year are
prepared in accordance with the Accounting Act (Official Gazette 78/15, 120/16) and International
Financial Reporting Standards ("IFRS") adopted by the European Union, in such a way that they provide
a true and fair presentation of the financial position, business results, cash flows and capital changes
for that period.
Based on the research conducted, the Management justifiably expects that the Company and the
Group have adequate funds for continuation of operations in the foreseeable future. Accordingly, the
Management Board prepared annual non-consolidated and consolidated financial statements under
the assumption that the Company's and the Group's operations will continue indefinitely.
When preparing the annual non-consolidated and consolidated financial statements, the Management
Board is responsible for:
• selection and then consistent application of appropriate accounting policies in accordance with
applicable financial reporting standards;
• granting reasonable and rational judgements and assessments;
• preparation of annual non-consolidated financial statements with the assumption of unlimited
business time, unless the assumption is inappropriate.
The Management is responsible for keeping correct accounting records, which will at any time reflect
with acceptable accuracy of the financial position, business results, cash flows and capital changes of
the Company and the Group, as well as their compliance with the Accounting Act and the International
Financial Reporting Standards. The Management Board is also responsible for safeguarding the assets
of the Company and the Group, and therefore for taking reasonable measures to prevent and detect
fraud and other illegalities.
The Management Board is also responsible for the preparation and the content of the Management
Report and the statement on the application of the corporate governance code, in accordance with
the Croatian Accounting Act. The management report and statement on the application of the
corporate governance code were approved for issuance by the Management Board and signed
accordingly. The Management Board is responsible for submitting its Management Report together
with consolidated and non-consolidated financial statements to the Supervisory Board.
36
After that, the Supervisory Board must approve the annual financial statements for their submission
to the General Assembly of shareholders for approval.
The consolidated and non-consolidated financial statements and the Management Report were
approved by the Management Board on April 12, 2024 for submission to the Supervisory Board and
were signed below by:
Eugen Paić-Karega Tvrtko Zlopaša
Chairman of the Management Board Member of the Management Board
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.
37
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
2023, 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 material 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 2023, 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.
38
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 2023: the Group EUR 146,409 thousand; the
Company: EUR 118,633 thousand (88 and 99 per cent, respectively, of the total revenue for 2023). Please refer to the Notes 2.20
of Material accounting policy information, Note 4 (a) of Key accounting estimates and judgements and Note 6 Business 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 accuracy of budgeting process including
effectiveness of management review;
• assessing the accuracy of contract budgets by analysing historical
accuracy of prior year budgets for selected completed and open
contracts;
• 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.
39
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.
40
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.
41
Report on the Audit of the Financial Statements (continued)
Responsibilities of Management and Those Charged with Governance for the Financial Statements
• 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 12 June 2023 to audit the financial statements of the
Company and the Group for the year ended 31 December 2023. Our total uninterrupted period of engagement is
seven years, covering the period from the year ended 31 December 2017 to the year ended 31 December 2023.
We confirm that:
• our audit opinion is consistent with the additional report presented to the Audit Committee of the
Company dated 11 April 2024;
• 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.
42
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 the Capital Market Act, we are required to
express an opinion on compliance of the separate and consolidated financial statements of the Company and the
Group as at and for the year ended 31 December 2023, as included in the attached electronic file “ dalekovoddd-
2023-12-31-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 and consolidated 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 Group’s ESEF reporting, as a part of the
financial reporting process.
Auditors' Responsibilities
Our responsibility is to express an opinion on whether the separate and consolidated financial statements comply,
in all material respects, with the RTS on ESEF, based on the evidence we have obtained. 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.
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.
Our procedures included, among other things:
• 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 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 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.
43
Report on Other Legal and Regulatory Requirements (continued)
Report on Compliance with the ESEF Regulation (continued)
Opinion
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 2023, 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 opinion 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. Furthermore, we do not express any assurance with
respect to other information included in documents in the ESEF format.
THIS AUDIT REPORT IS ELECTRONICALLY SIGNED BY THE AUDITORS AS AT THE ABOVE DATE
KPMG Croatia d.o.o. za reviziju
12 April 2024
Croatian Certified Auditors
Eurotower, 17
th
floor
Ivana Lučića 2a
10000 Zagreb
Hrvatska
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
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 EUR)
Note
2023
2022
2023
2022
Sales revenue
6
Other income
7
2,029
2,750
2,716
6,343
Change in work in progress and
finished goods
(25 )
(2 )
Cost of trade goods sold
(17,297)
(15,599)
(7,084)
(6,550)
Cost of materials and services
8
(95,520)
(66,875)
(73,906)
(53,290)
Staff costs
9
(37,669)
(37,918)
(27,603)
(27,405)
Depreciation and amortisation
16-18
(3,451)
(3,979)
(3,060)
(3,627)
Other operating expenses
10
(10,526)
(12,847)
(9,098)
(9,025)
Value adjustment of financial
assets
11
(6,635)
(29 )
(6,291)
Operating gain/(loss)
(2,281)
2,123
(4,691)
Finance income
12
2,206
1,540
Finance costs
12
(1,527)
(1,478)
(1,497)
(1,396)
(482 )
Profit / (loss) before tax
(2,028)
1,641
(3,982)
Income tax
13
(1,170)
(793 )
(684 )
(635 )
Net profit / (loss) from
continuing operations
(3,198)
(4,666)
Net profit / (loss) from
discontinued operations
(12 )
(102 )
(80 )
(54 )
Net profit / (loss)
(3,210 )
(4,746)
Net profit / (loss) attributable to:
Equity holders of the Company
(3,210 )
(4,746)
Net profit / (loss)
(3,210 )
(4,746)
Basic profit / (loss) per share (in
EUR)
14
(0.08)
0.02
Diluted profit / (loss) per share
(in EUR)
14
(0.08)
0.02
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
The accounting policies and notes form an integral part of these financial statements.
45
Dalekovod Group
Dalekovod d.d.
(all amounts are expressed in
thousands of EUR)
Note
2023
2022
2023
2022
Net profit / (loss)
(3,210 )
(4,746 )
Other comprehensive income
/ (loss):
Gain on revaluation of assets
16
Other
(74 )
221
Total other comprehensive
income / (loss)
(74 )
Total comprehensive income /
(loss)
(3,284 )
(4,746 )
Comprehensive income /
(loss) attributable to:
Equity holders of the Company
(3,284 )
(4,746 )
Total comprehensive income /
(loss)
(3,284 )
(4,746 )
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The accounting policies and notes form an integral part of these financial statements.
46
Dalekovod Group
Dalekovod d.d.
(all amounts are expressed in
thousands of EUR)
Note
2023
2022
2023
2022
ASSETS
Intangible assets
16
Property, plant and equipment
17
Investment property
18
Investments in subsidiaries
20
Investments in associates
21
Loans and receivables
23
Non-current assets
Inventories
24
Trade and other receivables
25
Income tax receivable
Cash and cash equivalents
26
Assets held for sale
33
Current assets
Total assets
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITION (continued)
AS AT 31 DECEMBER 2023
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 EUR)
Note
2023
2022
2023
2022
EQUITY AND LIABILITIES
Share capital
27
Capital reserves
27
Legal reserves
27
Treasury shares
27
(1,124 )
(1,124 )
(1,124 )
(1,124 )
Statutory and other reserves
27
Revaluation reserves
27
Translation reserves
(739 )
(665 )
Accumulated loss
(1,499 )
(4,746 )
(1,110 )
Total equity
Borrowings
28
Provisions
30
Deferred tax liability
15
Non-current liabilities
Borrowings
28
Provisions
30
Trade and other payables
29
Income tax payable
Liabilities held for sale
33
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 2023
The accounting policies and notes form an integral part of these financial statements.
48
Group
(all amounts are expressed
in thousands of EUR)
Note
Share
capital
Capital
reserves
Legal
reserves
Treasury
shares
Statutory
and other
reserves
Revaluation
reserves
Translation
reserve
Accumulated
loss
Total
At 1 January 2022
(restated)
(1,124)
5,720
5,735
(609 )
(383 )
64,105
Net profit/(loss) (restated)
746
746
Other comprehensive
income/(loss)
(56 )
892
Total comprehensive
income/(loss)
(56 )
At 31 December 2022
(1,124)
5,759
6,405
(665 )
Net profit/(loss)
(3,210)
(3,210)
Other comprehensive
income/(loss)
(74 )
(74 )
Total comprehensive
income/(loss)
(74 )
(3,210)
(3,284 )
Transactions with owners
Other changes
(306 )
(306 )
Share capital decrease
27
(13,497 )
1,110
At 31 December 2023
(1,124)
5,453
6,405
(739 )
(1,499 )
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
The accounting policies and notes form an integral part of these financial statements.
49
Company
(all amounts are
expressed in thousands of
EUR)
Note
Share
capital
Capital
reserves
Treasury
shares
Statutory and
other
reserves
Revaluation
reserves
Accumulated loss
Total
At 1 January 2022
(1,124)
1,124
5,735
(1,611)
Net profit/(loss) - restated
Other comprehensive
income/(loss)
Total comprehensive
income/(loss)
At 31 December 2022
(1,124)
1,124
6,405
(1,110)
Net profit/(loss)
(4,746)
(4,746)
Total comprehensive
income/(loss)
(4,746)
(4,746)
Transactions with owners
Share capital decrease
27
(13,497)
At 31 December 2023
(1,124)
1,124
6,405
(4,746)
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
The accounting policies and notes form an integral part of these financial statements.
50
Dalekovod Group
Dalekovod d.d.
(all amounts are expressed in
thousands of EUR)
Note
2023
2022
2023
2022
Profit/(loss) before tax
(2,040 )
(4,062 )
897
Adjustments:
Depreciation and
amortisation
16-18
Property, plant and
equipment write-off
10
Loss/(gain) on sale of
property, plant and
equipment
17
(6 )
Impairment of trade
receivables and loans
receivable
11
(1 )
(345 )
(63 )
Impairment of other financial
assets
11
Capitalization of salary costs
16
(6 )
(82 )
(6 )
(82 )
Impairment of investments in
subsidiaries
10
(265 )
Impairment of inventories and
inventory shortages
10
Net change in provisions
30
(533 )
(305 )
Dividend income
12
(978 )
(280 )
Unrealised foreign exchange
differences
(701 )
(82 )
(709 )
(86 )
Interest income
12
(19 )
(69)
(82 )
Transfer to assets intended
for sale
Income from unwinding of
discount
12
(123 )
(123 )
Other finance income
12
(650 )
(12 )
(91 )
(12 )
Interest expenses
12
Changes in working capital:
Trade and other receivables
(1,487 )
(15,883 )
(2,858 )
(18,229 )
Inventories
(5,988 )
(828 )
(1,351 )
(53 )
Trade and other payables
790
Net cash generated from
operating activities
(10,564 )
(10,090 )
Interest paid
(290 )
(4,859 )
(289 )
(4,917 )
Tax paid
(994 )
(1,187 )
(635 )
(1,057 )
Net cash flows from
operating activities
(16,610 )
(16,064 )
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
The accounting policies and notes form an integral part of these financial statements.
51
Dalekovod Group
Dalekovod d.d.
(all amounts are expressed in
thousands of EUR)
Note
2023
2022
2023
2022
Cash flows from investing
activities
Acquisition of intangible assets
16
(120 )
(603 )
(101 )
(601 )
Acquisition of property, plant and
equipment
17
(1,939 )
(666 )
(1,538)
(377 )
Proceeds from sale of property,
plant and equipment
Net change in deposits
(13 )
(35 )
Loans given
(28 )
(40 )
(481 )
(712 )
Repayments of loans given
Proceeds from sale of subsidiary
20
Proceeds from sale of associated
company
20
Proceeds from share in profits
Interest received
Net cash flows used in investing
activities
(1,223 )
(823 )
(409 )
(717 )
Cash flows from financing
activities
Proceeds from borrowings
4,900
Repayment of borrowings
(1,332)
(33,955 )
(1,332)
(33,984 )
Repayment of mezzanine
(4,121 )
(4,760 )
Redemption of bonds
(188 )
(180 )
(248 )
(238 )
Cash receipts from the increase in
the share capital
Repayment of lease liabilities
(1,069)
(3,583 )
(1,035)
(3,511 )
Net cash flows from / (used in)
financing activities
Net increase / (decrease) in cash
(3,893 )
(3,895 )
Cash at beginning of year
Cash at end of year
26
Net increase / (decrease) in cash
(3,893 )
(3,895 )
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
52
NOTE 1 – GENERAL INFORMATION
At 31 December 2023 the Dalekovod Group (the Group) comprises of the parent company Dalekovod
subsidiary and one entity run as joint venture (2022: 14 subsidiaries owned by the parent company and
one entity run as joint venture) – note 20 and 21.
Dalekovod d.d., Zagreb (the Company) was incorporated in compliance with the laws and regulations of
the Republic of Croatia . The registered office of the Company is in Zagreb , Marijana Čavića 4 street. The
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 infrastructure.
Members of the Supervisory Board:
Gordan Kolak
President of the Supervisory Board
Josip Jurčević
Vice president of the Supervisory Board
Josip Lasić
Member of the Supervisory Board
Dražen Buljić
Member of the Supervisory Board
Božidar Poldrugač
Member of the Supervisory Board
Damir Spudić
Member of the Supervisory Board
Pavao Vujnovac
Member of the Supervisory Board
Tomislav Rosandić
President of the Management Board (until 31 March 2024)
Eugen Paić-Karega
Member of the Management Board (until 31 March 2024)
President of the Management Board (from 1 April 2024)
Tvrtko Zlopaša
Member of the Management Board
Ivan Kurobasa
Member of the Management Board (until 31 March 2023)
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
53
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION
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
consistently applied to all the years presented, unless otherwise stated.
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 4.
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.
Change in funactional and presentational currency
Financial statements are presented in euro ("EUR"), which is the Company's and Group’s functional
currency and have been rounded to the nearest thousand.
Since the Republic of Croatia introduced the euro as the official currency on 1 January 2023, in
accordance with the Law on the introduction of the euro as the official currency in the Republic of
Croatia, the Company and the Group changed the presentation currency for the purposes of preparing
financial statements for the year ended 31 December 2023 from kuna to euro, and the financial
statements for the year ended 31 December 2023 were prepared for the first time in euro, rounded
to the nearest thousand. From 1 January 2023, the euro is also the functional currency of the Company
(until 1 January 2023, it was HRK). In this regard, the exchange rate of HRK 7.53450 to the euro was
used for the conversion of comparative data.
Although the change in the presentation currency in the financial statements represents a change in
accounting policy that requires retroactive application, the Company and the Group did not present
the third balance sheet in the financial statements for the year ended 31 December, 2023 in
accordance with International Accounting Standard 8 (IAS) Accounting Policies, Changes in Accounting
Estimates and Errors, given that it has determined that the change in the presentation currency has no
significant impact on the Company's financial statements, due to the stable HRK/EUR exchange rate
over the past few years.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
54
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (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
equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
(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.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
55
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
2.2 Consolidation (continued)
(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
within the Group have no effect on consolidated financial statements.
2.3 Foreign currencies
(a) 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.
(b) 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
the gain or loss on sale.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
56
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
2.4 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
Management Board of the Company.
2.5 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.
Revaluation of land
Land is 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 retained earnings
after the disposal of the asset.
| Useful live in years | |
| Buildings | 20 – 40 |
| Equipment | 5 – 10 |
| Machinery | 25 |
Buildings
Equipment
Machinery
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
57
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
2.6 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
becomes its deemed cost to be subsequently depreciated.
2.7 Intangible assets
Intangibles primarily relate to 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
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
are reviewed for possible reversal of the impairment at each reporting date.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
58
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (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.
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
made on an investment‑by‑investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are
measured at FVTPL. The Group and Company do not have recognized amounts of financial assets
measured at FVTPL.
The main categories of financial assets recognized by the Group and Company relate to cash and cash
equivalents, trade receivables and loans, all of which are measured at amortized cost, with trade
receivables and loans held in a held-to-collect business model.
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.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
59
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (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 (continued)
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.
Subsequent measurement and recognition of gains and losses
The table below provides an overview of key features of the accounting policy that the Group and
Company apply with respect to subsequent measurement and recognition of gains and losses of the
main financial asset category recognised in their financial statements:
(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
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.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
60
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (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.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
61
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
2.9 Financial instruments (continued)
2.9.4 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
period over which the Group is exposed to credit risk.
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.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
62
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
2.9 Financial instruments (continued)
2.9.4 Impairment of non-derivative financial assets (continued)
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
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.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
63
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
2.10 Leases (continued)
The Group and Company are Lessee (continued)
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
type of the asset leased.
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.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
64
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
2.10 Leases (continued)
The Group and Company are Lessee (continued)
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
to the income statement on a straight-line basis over the period of the lease.
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
the leased property are matched.
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).
Small inventory and tools are written off when put into use.
2.12 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, deposits held at call with banks and other short-
term highly liquid instruments with original maturities of three months or less.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
65
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
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
the Company’s equity holders.
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
right to defer settlement of the liability for at least 12 months after the balance sheet date.
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
authorities.
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
will be available against which the temporary differences can be utilised.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
66
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (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
different taxable entities where there is an intention to settle the balances on a net basis.
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
discounted to their present value.
(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
payable, estimated benefit cost and the discount rate.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
67
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
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
recognised as interest expense.
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
under IFRS 15 applicable to revenue streams are as follows:
(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.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
68
NOTE 2 – MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
2.20 Revenue recognition (continued)
(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
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
Company’s shareholders.
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
year.
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
VAT.
2.24 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
carrying value based on equity method and fair value less cost to sell.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
69
NOTE 3 – FINANCIAL RISK MANAGEMENT
3.1 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 directions, 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 EUR. 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. The movement in the exchange rates between the EURO and other currencies
does not have a significant impact on the Group’s and the Company’s operating results, and the
Company does not use financial instruments to protect against currency risk.
At 31 December 2023, if the SEK had weakened/strengthened by 1.00% against the EUR (2022: 1.00%),
with all other variables held constant, the net profit for the reporting period after tax would have been
EUR 94 thousand for the Group and EUR 136 thousand for the Company (2022: EUR 120 thousand for
the Group and EUR 63 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
monitors market transactions and performance of investment entities.
(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 commercial papers. 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 2023, if the effective interest rate on borrowings
with variable rates had increased/decreased by 0.82% on an annual level (2022: 0.82%), the loss after
tax would have been higher/lower by EUR 19 thousand (2022: HRK 357 thousand) as a result of a
higher/lower interest expense.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
70
NOTE 3 – FINANCIAL RISK MANAGEMENT (CONTINUED)
3.1 Financial risk factors (continued)
(b) 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. The table
below shows the maturities of contractual liabilities and receivables shown in the balance sheet at the
end of the reporting period. The analysis was made on the basis of undiscounted cash outflows by
financial liabilities and by financial assets on the maturity date. The tables show cash flows by principal
and interest.
For the Group:
For the Company:
| Average weighted interest rate | Up to 1 year | 1 – 5 years | Over 5 years | Total contracted cash flows | Net book value | |
| 31 December 2023 | ||||||
| Loans receivable anddeposits | 1% | 2,128 | 6,126 | - | 8,254 | 8,193 |
| Trade and other receivables | 56,557 | - | - | 56,557 | 56,557 | |
| Cash and cash equivalent | 12,345 | - | - | 12,345 | 12,345 | |
| Trade and other payables | (30,664) | - | - | (30,664) | (30,664) | |
| Borrowings | 4.90% | (4,293) | (7,778) | (853) | (12,924) | (11,954) |
| 36,073 | (1,652) | (853) | 33,568 | 34,477 | ||
| 31 December 2022 | ||||||
| Loans receivable anddeposits | 4,825 | 5,301 | - | 10,126 | 10,074 | |
| Trade and other receivables | 1% | 61,118 | - | - | 61,118 | 61,118 |
| Cash and cash equivalent | 3,784 | - | - | 3,784 | 3,784 | |
| Trade and other payables | (25,448) | - | - | (25,448) | (25,448) | |
| Borrowings | 5.10% | (4,116) | (4,053) | (770) | (8,939) | (8,285) |
| 40,163 | 1,248 | (770) | 40,641 | 41,243 |
| Average weighted interest rate | Up to 1 year | 1 – 5 years | Over 5 years | Total contracted cash flows | Net book value | |
| 31 December 2023 | ||||||
| Loans receivable and deposits | 1% | 2,294 | 6,215 | 8,509 | 8,447 | |
| Trade and other receivables | 49,185 | 49,185 | 49,185 | |||
| Cash and cash equivalent | 10,262 | 10,262 | 10,262 | |||
| Trade and other payables | (25,477) | (25,477) | (25,477) | |||
| Borrowings | 4.80% | (4,582) | (8,273) | (882) | (13,737) | (12,546) |
| 31,682 | (2,058) | (882) | 28,742 | 29,871 | ||
| 31 December 2022 | ||||||
| Loans receivable and deposits | 1% | 7,350 | 5,435 | 12,785 | 12,731 | |
| Trade and other receivables | 57,104 | 57,104 | 57,104 | |||
| Cash and cash equivalent | 2,837 | 2,837 | 2,837 | |||
| Trade and other payables | (23,410) | (23,410) | (23,410) | |||
| Borrowings | 4.90% | (5,121) | (4,330) | (1,016) | (10,467) | (9,659) |
| 38,760 | 1,105 | (1,016) | 38,849 | 39,603 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
71
NOTE 3 – FINANCIAL RISK MANAGEMENT (CONTINUED)
3.1 Financial risk factors (continued)
(c) 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. Further, judgements and estimates in respect of credit
risk exposure and related impairment provisions are described in more detail in note 2.9.5.
3.2 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.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
72
NOTE 3 – FINANCIAL RISK MANAGEMENT (CONTINUED)
3.2 Capital risk management (continued)
The Company's gearing ratio was as follows:
The Group's gearing ratio was as follows:
| (in thousands of EUR) | 31 December 2023 | 31 December 2022 |
| Borrowings (note 28) | 12,546 | 9,659 |
| Cash and cash equivalents (note 26) | (10,262) | (2,837) |
| Net debt | 2,284 | 6,822 |
| Equity | 55,293 | 60,039 |
| Total equity and net debt | 57,577 | 66,861 |
| Gearing ratio - Company | 4.0% | 10.2% |
| (in thousands of EUR) | 31 December 2023 | 31 December 2022 |
| Borrowings (note 28) | 11,954 | 8,285 |
| Cash and cash equivalents (note 26) | (12,345) | (3,784) |
| Net debt | (391) | 4,501 |
| Equity | 62,152 | 65,742 |
| Total equity and net debt | 61,761 | 70,243 |
| Gearing ratio - Group | (0.6%) | 6.4% |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
73
NOTE 3 – FINANCIAL RISK MANAGEMENT (continued)
3.3 Fair value estimation
The Group publishes fair value measurements by level in accordance with the following 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 Company’s and Group’s assets at fair value:
There were no transfers between level 1 and level 2 during 2023 and 2022.
| (in thousands of EUR) | Level 1 | Level 2 | Level 3 | Total |
| Group | ||||
| 31 December 2023 | ||||
| Property, plant and equipment | ||||
| Land | - | - | 8,815 | 8,815 |
| Total | - | - | 8,815 | 8,815 |
| 31 December 2022 | ||||
| Property, plant and equipment | ||||
| Land | - | - | 8,815 | 8,815 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
74
NOTE 4 – KEY 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 and Company recognise revenue primarily over time but also at a point in time, depending
on the specifics of a customer arrangement as described in the relevant accounting policy. When
recognising revenue over time which primarily related to the segment of construction, the method of
measuring progress highlights the importance of accuracy in measuring progress towards the
complete satisfaction of a performance obligation and may include estimates in the performance
scope and services required to satisfy contractual obligations. These significant estimates include total
estimated costs, total estimated revenues, contractual risks, including technical, political and
regulatory risks and other judgments. The Company and the Group have determined the input method
as the best method for measuring progress in providing services because there is a direct link between
Company’s and Group's effort (total project costs incurred) and the transfer of services to the
customer. If revenue is recognised over time, this is done by measuring costs incurred up to a certain
date in relation to total expected costs required to satisfy contractual obligations.
The Group also recognises revenue at a point in time (primarily in the production segment) for the
delivery of goods by recognising revenue when the customer obtains control of a particular item, being
when the goods are delivered to the customer, the customer has full discretion over the goods, and
there is no unsatisfied obligation that could affect the customer’s acceptance of the goods. Delivery
occurs when the goods have been shipped to the specific location, the risks of loss have been
transferred to the customer, and either the customer has accepted the goods in accordance with the
contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria
for acceptance have been satisfied.
(b) Recoverability of investment in subsidiaries
On an annual basis, the Company carries out the process of identifying indicators that would indicate
that the value of investments in subsidiaries (shown in note 20) is potentially impaired and, if such
indicators are identified, the Company conducts an assessment of the recoverable amount of the
investment through impairment testing.
When implementing the process of identification of impairment indicators, the Company considers a
number of factors. Depending on the circumstances, a single factor by itself or several of them in
combination may result in an indication of impairment. Unfavorable developments in the industry,
such as the recent COVID 19 pandemic or macroeconomic disturbances due to the war in Ukraine,
which led to challenges in supply chains and the lack of necessary quantities of semiconductors, as a
rule, result in the implementation of impairment tests if their significant impact on the operating
results of dependent and affiliated companies. In addition to the above, the Company monitors the
key performance indicators of subsidiaries, the most important of which are realized operating margins
and net assets of subsidiaries.
When the Company concludes for a particular investment that one factor by itself or several of them
in combination result in an indication of impairment, a detailed impairment test and assessment of the
recoverable value of the investment is prepared. As a rule, the discounted cash flow method (DCF
method) is used to make an investment assessment, which is based on the assumption that the value
of the company represents the present value of future net cash flows.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
75
NOTE 4 – KEY ACCOUNTING ESTIMATES AND JUDGMENTS
(b) Recoverability of investment in subsidiaries (continued)
When calculating the recoverable amount, the Company as a rule applies the terminal growth rate of
cash flows after the estimated period until business stability and discounts such cash flows using a
discount rate that reflects the risk of the asset in question and which, for the purposes of calculating
the impairment test, is approximated by the weighted average cost of capital (WACC) related to the
primary sales market of each subsidiary and industry. Impairment tests are also tested for sensitivity
to changes in key variables such as the discount rate, growth rate, and the like. The company also takes
into account impairments carried out in previous periods and considers potential cancellations of
impairments carried out in previous periods, and to what extent, taking into account other
circumstances in which subsidiaries operate (liquidity, stability of operations over a long period of
years etc).
NOTE 5 – APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
Except for the changes below, the Company and the Group have consistently applied the accounting
policies as set out in the Notes below to all periods presented in these consolidated financial
statements.
(a) Effective standards, amendments to standards and implementations – adopted in 2023
In 2023 the following standards, amendments or interpretations came into force:
- IFRS 17 Insurance Contracts (issued on 18 May 2017); including Amendments to IFRS 17
(issued on 25 June 2020);
- Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates (issued on 12 February 2021);
- Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2:
Disclosure of Accounting policies (issued on 12 February 2021);
- Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising
from a Single Transaction (issued on 7 May 2021);
- Amendments to IAS 12 Income taxes: International Tax Reform – Pillar Two Model Rules
(issued on 23 May 2023);
- Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 –
Comparative Information (issued on 9 December 2021).
Adoption of these standards and amendments has not determined substantial effects on the amounts
recognized in balance sheet or income statement or impact on disclosure of accounting policies.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
76
NOTE 5 – APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
(CONTINUED)
(b) Standards, amendments to standards and interpretations issued but not yet effective
The standards, amendments to standards and interpretations that are issued, but not yet effective, up
to the date of issuance of the financial statements are disclosed below. The Group intends to adopt
these standards, if applicable, when they become effective.
Until 31 December 2023, the European Commission endorsed the following changes to the Accounting
principles applicable to reporting, these were not effective for preparation of 2023 financial
statements:
- Amendments to IAS 1: Presentation of Financial Statements: Classification of Liabilities as Current
or Non-current, Classification of Liabilities as Current or Non-current - Deferral of Effective Date
and Non-current Liabilities with Covenants (issued on 23 January 2020, 15 July 2020 and 31 October
2022 respectively),
- Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued on 22 September
2022).
As at 31 December 2023 the IASB issued the following standards, amendments, interpretations or
revisions, whose application is subject to completion of the endorsement process by the competent
bodies of the European Commission, which is still ongoing:
- Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability
(issued on 15 August 2023),
- Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures:
Supplier Finance Arrangements (issued on 25 May 2023).
NOTE 6 – 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
and they are not allocated by operating segments.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
77
NOTE 6 – BUSINESS SEGMENT INFORMATION (continued)
Operating results by business segments for the Group
| (in thousands of EUR) | Construction | Production | Other | Total |
| Year ended 31 December 2023 | ||||
| Gross revenues | 151,534 | 28,663 | 1 | 180,198 |
| Inter-segment revenues /i/ | (5,125) | (9,283) | - | (14,408) |
| Total revenues | 146,409 | 19,380 | 1 | 165,790 |
| Operating profit/(loss) before depreciation andamortisation | (735) | 1,918 | (1) | 1,170 |
| Depreciation and amortisation | (3,283) | (168) | - | (3,451) |
| Operating profit/(loss) | (4,018) | 1,750 | (1) | (2,281) |
| Total assets | 116,854 | 20,421 | 59 | 137,340 |
| Total liabilities | 63,915 | 11,806 | 15 | 75,777 |
| Year ended 31 December 2022 | ||||
| Gross revenues | 124,715 | 24,719 | 1 | 149,435 |
| Inter-segment revenues /i/ | (1,244) | (11,546) | - | (12,790) |
| Total revenues | 123,471 | 13,173 | 1 | 136,645 |
| Operating profit/(loss) before depreciation andamortisation | 5,689 | 514 | 1 | 6,102 |
| Depreciation and amortisation | (3,825) | (154) | - | (3,979) |
| Operating loss | 1,864 | 360 | 1 | 2,123 |
| Total assets | 109,277 | 20,303 | 46 | 129,642 |
| Total liabilities | 46,320 | 17,165 | 296 | 63,900 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
78
NOTE 6 – BUSINESS SEGMENT INFORMATION (continued)
/i/ Sales are allocated based on the country in which the customer is located.
In 2023, the Group generated 14% of total revenues with its largest customer (Company: 19%). With
the next largest customer, the Group generated 13% of its total revenues in 2023 (Company: 18%).
In 2022, the Group achieved 14% with the largest customer (Company: 20%). With the next largest
customer, the Group generated 13% of its total revenues in 2022 (Company: 19%).
/ii/ Sales revenues by sectors are as follows: Group
Revenue from construction contracts amounts to EUR 146,409 thousand for the Group (2022: EUR
123,471 thousand) and 118,633 thousand for the Company (2022.: EUR 94,298 thousand). Revenues
from construction contracts are recognized over time while revenues from production are recognized
at a specific point in time.
| /ii/ Sales revenues by sectors are as follows: | Group | |
| 2023 | 2022 | |
| (in thousands o | f EUR) | |
| Energetics | 124,414 | 106,349 |
| Railroads | 7,308 | 5,589 |
| Sale of metal constructions | 6,973 | 4,606 |
| Sale of suspension and jointing equipment | 12,407 | 8,566 |
| Roads | 9,349 | 5,482 |
| Projects | 4,870 | 4,857 |
| Properties | 23 | 485 |
| Other | 446 | 711 |
| Total | 165,790 | 136,645 |
| 2023(in thousands of EUR) | % | 2022(in thousands of EUR) | % | |
| Croatia | 53,757 | 32.42 | 38,433 | 28.13 |
| Sweeden | 38,272 | 23.08 | 35,769 | 26.18 |
| Norway | 23,397 | 14.11 | 20,129 | 14.73 |
| Slovenia | 14,387 | 8.68 | 15,645 | 11.45 |
| Bosnia and Herzegovina | 11,587 | 6.99 | 9,285 | 6.79 |
| Macedonia | 6,020 | 3.63 | 1,785 | 1.30 |
| Ukraine | 4,254 | 2.57 | 6,596 | 4.83 |
| Germany | 2,387 | 1.44 | 1,363 | 1.00 |
| United Kingdom | 425 | 0.26 | 513 | 0.38 |
| France | - | - | 7 | 0.01 |
| Other abroad | 11,304 | 6.82 | 7,120 | 5.20 |
| Total | 165,790 | 100.00 | 136,645 | 100.00 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
79
NOTE 6 – 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
obligation:
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 for the Company, which are active on the reporting
date, are shown within advances in note 29 and amount to EUR 9,601 thousand (2022: EUR 8,477
thousand) and for the Group EUR 11,168 thousand (2022: EUR 9,417 thousand).
The Company's rental income is realized from investment property (note 18), on the basis of leases that
the Company concluded with its subsidiaries Dalekovod MK d.o.o. and Dalekovod OSO d.o.o.
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| Trade receivables | 35,483 | 36,960 | 30,617 | 35,408 |
| Guarantee deposits - retention | 7,411 | 9,098 | 7,410 | 9,096 |
| Contract assets | 20,830 | 17,362 | 17,988 | 14,754 |
| Contract liabilities | (18,530) | (14,930) | (15,864) | (13,990) |
| 45,194 | 48,490 | 40,151 | 45,268 |
| Dalekovod Group | Dalekovod d.d. | |||
| (in thousands of EUR) | 2023 | 2022 | 2023 | 2022 |
| Income from reversal of provisions | 697 | 804 | 678 | 505 |
| Insurance claims proceeds | 61 | 57 | 58 | 50 |
| Rental income | 88 | 101 | 857 | 3,996 |
| Court settlement income | 10 | - | 10 | - |
| Inventory surpluses | 1 | 7 | - | - |
| Fair valuation of libilities to secured creditors | 134 | 1,169 | - | 1,000 |
| Other operating income | 1,038 | 612 | 1,113 | 792 |
| 2,029 | 2,750 | 2,716 | 6,343 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
80
NOTE 7 – OTHER INCOME (continued)
The most significant part of the other income refers to the income from the sale of waste that comes
from the Sweden branch in the amount of 657 thousand euros, and most of it is related to the customer
Other employee expenses include gifts, jubilee awards, field allowance, labor hire services, employee
performance awards, and other benefits.
The costs of employees include the calculated costs for management bonuses, the Company 413
thousand euros and the Group 507 thousand euros.
As of December 31, 2023, there were 1,029 employees in the Group (2022: 1,088 employees), and 645
| Dalekovod Group | Dalekovod d.d. | |||
| (in thousands of EUR) | 2023 | 2022 | 2023 | 2022 |
| Raw materials and supplies | ||||
| Raw materials and supplies | 46,577 | 25,684 | 40,396 | 26,134 |
| Energy | 2,711 | 3,262 | 1,900 | 2,236 |
| Spare parts and small inventory | 1,149 50,437 | 1,139 30,085 | 1,010 43,306 | 948 29,318 |
| External services | ||||
| Subcontractor services | 32,438 | 27,785 | 19,969 | 15,258 |
| Rental expense | 7,162 | 3,415 | 7,063 | 5,130 |
| Transportation | 2,421 | 2,352 | 1,436 | 1,449 |
| Repairs and maintenance | 2,039 | 2,131 | 1,495 | 1,668 |
| Advertising and promotion | 253 | 168 | 226 | 107 |
| Other | 770 | 939 | 411 | 360 |
| 45,083 | 36,790 | 30,600 | 23,972 | |
| Total cost of materials and services | 95,520 | 66,875 | 73,906 | 53,290 |
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| Net salaries | 23,533 | 24,263 | 18,042 | 19,024 |
| Taxes and contributions on and from | ||||
| salaries | 9,569 | 8,739 | 6,218 | 5,769 |
| Severance costs | 496 | 440 | 351 | 423 |
| Other staff costs | 4,071 | 4,476 | 2,992 | 2,189 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
81
NOTE 10 – OTHER OPERATING EXPENSES
Costs of intellectual and non-production services at the Group level include fees to the audit firm
related to audit services and permitted non-audit consulting services. Fees payable to the statutory
auditors of the Company for the year ended 31 December 2023 amounted to 76 thousand euros (2022:
70 thousand euros), and at the level of the Group they amount to 118 thousand euros (2022: 109
thousand euros). These fees relate to statutory audits of Group companies.
During 2023, the auditors provided permissible non-audit services to the Group in the amount of 30
thousand euros (2022: nil) with respect to financial advisory services.
Within the costs of intellectual and non-production services, there are non-production services, which
largely consist of various testing, testing, commissioning, etc. services on projects, followed by legal
services, design services and security services.
The cost of daily allowances and travel cost in 2023 includes the cost of accommodation and food,
which to a significant extent are the costs of workers in the field, especially seconded workers.
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| Intellectual and non-production services | 2,788 | 4,460 | 2,676 | 1,997 |
| Daily allowances and travel cost | 2,720 | 3,508 | 2,503 | 3,264 |
| Insurance | 1,296 | 1,103 | 1,156 | 896 |
| Bank charges | 962 | 1,188 | 781 | 1,045 |
| Taxes and contributions | 641 | 607 | 474 | 444 |
| Entertainment | 456 | 306 | 234 | 160 |
| Impairment of inventories (restated) | 324 | 41 | - | - |
| Court cases | 299 | 234 | 299 | 205 |
| Interest from suppliers | 70 | 54 | 41 | 12 |
| Sponsorships, donations and other aids | 50 | 77 | 26 | 34 |
| Fines and penalties | 56 | 36 | 27 | 7 |
| Impairment and write-off of property, plant and equipment Inventory shortages | 41 24 | -5 | -6 | -2 |
| Other | 799 | 1,228 | 875 | 959 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
82
Impairment of financial assets relates mostly to the impairment allowance for receivables from the
Ministry of Finance where the Company initiated the collection of the receivable in accordance with
contractual terms. However, in November 2023 the Company received a first instance ruling from the
Commercial Court in Zagreb which rejected the Company's request for collection and payment of the
receivable. The Company appealed this ruling and on 25 March 2024 received a decision of the High
Commercial Court of the Republic of Croatia which annulled the first-instance ruling. However, this has
not resulted in the collection of the receivable as the court instead returned the case to the
Commercial Court in Zagreb for a new ruling. Management assessed, after consultation with legal
counsel, that the circumstances following the the initial ruling against the Company indicate that
uncertainties with respect to the collection of the receivable have significantly increased and has
Income from profit sharing at the level of the Company refers to the voted profits of the companies
Dalekovod Projekt d.o.o., Dalekovod EMU d.o.o. and Dalekovod Ljubljana d.o.o.
As part of other financial income at the Company level, income from the sale of shares in the company
Dalekovod Adria d.o.o. was reported in the amount of 91 thousand euros and 645 thousand euros at the
| Dalekovod Group | Dalekovod d.d. | |||
| (in thousands of EUR) | 2023 | 2022 | 2023 | 2022 |
| Impairment of financial assets | 6,636 | - | 6,636 | - |
| Impairment of trade receivables and loans – net | (1) | 29 | (345) | (63) |
| 6,635 | 29 | 6,291 | (63) |
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| Net foreign exchange differences | ||||
| from financing activities Interest income | 1,116 11 | 843 3 | 1,064 68 | 778 82 |
| Income from unwinding of discount | - | 123 | - | 123 |
| Interest income on bank deposits | 2 | 16 | 1 | - |
| Income from shares in profit | - | - | 978 | 280 |
| Income from interest and fees write-offs | - | - | - | 265 |
| Other finance income | 651 | 11 | 95 | 12 |
| Finance income | 1,780 | 996 | 2,206 | 1,540 |
| Net foreign exchange differences | ||||
| (financing activities) | (415) | (761) | (355) | (691) |
| Interest expense | (901) | (627) | (931) | (691) |
| Cost of writing off interest andfees | - | (14) | - | (14) |
| The cost of discounting long-term receivables | (211) | - | (211) | - |
| Other financial expenses | - | (76) | - | - |
| Finance costs | (1,527) | (1,478) | (1,497) | (1,396) |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
83
NOTE 13 – INCOME TAX
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
(in thousands of EUR)
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| Profit/(loss) before tax | (2,686) | 1,539 | (4,062) | 897 |
| Tax calculated at the domestic tax rate applicable to profits in the respective countries | 468 | 799 | (329) | 617 |
| Effect of non-taxable income | (286) | (158) | (269) | (132) |
| Effect of non-deductible expenses | 396 | 337 | 236 | 267 |
| Effect of tax losses not recognised as deferred tax | ||||
| assets | 1,049 | - | 1,049 | - |
| Utilisation of tax losses for which deferred tax assets was not recognised | (454) | (139) | - | (72) |
| (3) | (46) | (3) | (45) | |
| Income tax expense | 1,170 | 793 | 684 | 635 |
| Effective tax rate | (43.6%) | 51.5% | (16.8%) | 70.8% |
Profit/(loss) before tax
Tax calculated at the domestic tax
rate applicable to profits in the
respective countries
Effect of non-taxable income
Effect of non-deductible expenses
Effect of tax losses not recognised
as deferred tax
assets
Utilisation of tax losses for which
deferred tax assets was not
recognised
Income tax expense
Effective tax rate
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| Unutilised tax losses | ||||
| Tax loss from 2018 - expires 2023 | - | 13,295 | - | 9,746 |
| Tax loss from 2019 - expires 2024 | 4,690 | 4,690 | - | - |
| Tax loss from 2020 - expires 2025 | 7,841 | 7,841 | 5,854 | 5,854 |
| Tax loss from 2021 - expires 2026 | 6,364 | 6,364 | 6,233 | 6,233 |
| Tax loss from 2023 - expires 2028 | 5,826 | - | 5,826 | - |
| 24,721 | 32,190 | 17,913 | 21,833 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
84
NOTE 13 – INCOME TAX (continued)
The Company and the Group did not recognise deferred tax asset as it is not probable that future
taxable profits 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 17).
Movement in deferred tax liability
NOTE 14 – 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
treasury shares. There are no diluted potential ordinary shares.
NOTE 15 – DIVIDEND PER SHARE
In 2022, a write-off of liabilities for dividends in the amount of eur 13 thousand was carried out, which
was shown as a liability for dividends under the item "liabilities to suppliers and other liabilities" (note
29) and related to dividends for shareholders who did not deliver necessary data for payment and the
legal deadline for payment thereof has passed.
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| At beginning of year | 1,406 | 1,259 | 1,406 | 1,259 |
| Charged to revaluation reserves | - | 199 | - | 199 |
| Canceled | - | (52) | - | (52) |
| At end of year | 1,406 | 1,406 | 1,406 | 1,406 |
| (in thousands of EUR) | Dalekovod Group2023 | 2022 |
| Net loss attributable to shareholders (in thous. of EUR) | (3,210) | 746 |
| Weighted average number of shares | 41,246,205 | 30,996,205 |
| Basic/diluted loss per share (in EUR) | (0.08) |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
85
NOTE 16 – INTANGIBLE ASSETS
Group
Goodwill is allocated entirely to the Construction segment.
(in thousands of EUR)
| (in thousands of EUR) | Goodwill | Software | Assets under construction | Total |
| At 1 January 2022 | ||||
| Cost | 161 | 6,075 | 4 | 6,240 |
| Accumulated amortisation and impairment losses | - | (5,772) | - | (5,772) |
| Net book value | 161 | 303 | 4 | 468 |
| Year ended 31 December 2022 | ||||
| At 1 January | 161 | 303 | 4 | 468 |
| Additions | - | 2 | 601 | 603 |
| Capitalized salary costs | - | - | 82 | 82 |
| Amortisation | - | (170) | - | (170) |
| At 31 December | 161 | 135 | 687 | 983 |
| At 31 December 2022 | ||||
| Cost | 161 | 6,077 | 687 | 6,925 |
| Accumulated amortisation and impairment losses | - | (5,942) | - | (5,942) |
| Net book value | 161 | 135 | 687 | 983 |
| Year ended 31 December 2023 | ||||
| At 1 January | 161 | 135 | 687 | 983 |
| Additions | - | 9 | 111 | 120 |
| Capitalized salary costs | - | - | 6 | 6 |
| Transfer | - | 712 | (712) | - |
| Amortisation | - | (140) | - | (140) |
| At 31 December | 161 | 716 | 92 | 969 |
| At 31 December 2023 | ||||
| Cost | 161 | 6,798 | 92 | 7,051 |
| Accumulated amortisation and impairment losses | - | (6,082) | - | (6,082) |
| Net book value | 161 | 716 | 92 | 969 |
At 1 January 2022
Cost
Accumulated amortisation and
impairment losses
Net book value
Year ended 31 December 2022
At 1 January
Additions
Capitalized salary costs
Amortisation
At 31 December
At 31 December 2022
Cost
Accumulated amortisation and
impairment losses
Net book value
Year ended 31 December 2023
At 1 January
Additions
Capitalized salary costs
Transfer
Amortisation
At 31 December
At 31 December 2023
Cost
Accumulated amortisation and
impairment losses
Net book value
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
86
NOTE 16 – INTANGIBLE ASSETS (continued)
Company
| (in thousands of EUR) | Software | Assets under construction | Total |
| At 1 January 2022 | |||
| Cost | 5,659 | - | 5,659 |
| Accumulated amortisation | (5,424) | - | (5,424) |
| Net book value | 235 | - | 235 |
| Year ended 31 December 2022 | |||
| At 1 January | 235 | - | 235 |
| Additions | - | 601 | 601 |
| Capitalized salary costs | - | 82 | 82 |
| Amortisation | (149) | - | (149) |
| At 31 December | 86 | 683 | 769 |
| At 31 December 2022 | |||
| Cost | 5,659 | 683 | 6,342 |
| Accumulated amortisation | (5,573) | - | (5,573) |
| Net book value | 86 | 683 | 769 |
| Year ended 31 December 2023 | |||
| At 1 January | 86 | 683 | 769 |
| Additions | - | 101 | 101 |
| Capitalized salary costs | - | 6 | 6 |
| Transfer | 704 | (704) | - |
| Amortisation | (120) | - | (120) |
| At 31 December | 670 | 86 | 756 |
| At 31 December 2023 | |||
| Cost | 6,363 | 86 | 6,449 |
| Accumulated amortisation | (5,693) | - | (5,693) |
| Net book value | 670 | 86 | 756 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
87
NOTE 17 – PROPERTY, PLANT AND EQUIPMENT
Group
| (in thousands of EUR) | Land | Buildings | Plant and equipment | Assets under construction | Total |
| At 1 January 2022 | |||||
| Cost or deemed cost | 12,682 | 38,892 | 50,323 | 108 | 102,005 |
| Accumulated depreciation | - | (30,574) | (35,292) | - | (65,866) |
| Net book value | 12,682 | 8,318 | 15,031 | 108 | 36,139 |
| - | |||||
| Year ended 31 December 2022 | - | ||||
| At 1 January | 12,682 | 8,318 | 15,031 | 108 | 36,139 |
| Additions | - | 12 | 2,143 | 2 | 2,157 |
| Disposals and write-offs | (3,355) | (5) | (407) | - | (3,767) |
| Revaluation | 1,108 | - | - | - | 1,108 |
| Foreign exchange differences | 1 | - | - | - | 1 |
| Depreciation | - | (770) | (3,039) | - | (3,809) |
| At 31 December | 10,436 | 7,555 | 13,728 | 110 | 31,829 |
| At 31 December 2022 | |||||
| Cost or deemed cost | 10,436 | 38,900 | 52,058 | 110 | 101,504 |
| Accumulated depreciation and impairment losses | - | (31,345) | (38,330) | - | (69,675) |
| Net book value | 10,436 | 7,555 | 13,728 | 110 | 31,829 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
88
NOTE 17 – PROPERTY, PLANT AND EQUIPMENT (continued)
Group
| Year ended 31 December 2023 | Land | Buildings | Plant and equipment | Assets under construction | Total |
| At 1 January | 10,436 | 7,555 | 13,728 | 110 | 31,829 |
| Transfer | - | 36 | (36) | - | - |
| Correction of IFRS 16 | - | - | (109) | - | (109) |
| Disposals and write-offs | - | (3) | (632) | (41) | (676) |
| Additions | - | 27 | 3,835 | - | 3,862 |
| Depreciation | - | (742) | (2,569) | - | (3,311) |
| At 31 December | 10,436 | 6,873 | 14,217 | 69 | 31,595 |
| At 31 December | |||||
| 2023 | |||||
| Cost or deemed cost | 10,436 | 38,963 | 55,748 | 69 | 105,216 |
| Accumulated depreciation and impairment losses | - | (32,090) | (41,531) | - | (73,621) |
| Net book value | 10,436 | 6,873 | 14,217 | 69 | 31,595 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
89
NOTE 17 – PROPERTY, PLANT AND EQUIPMENT (continued)
Company
(in thousands of
EUR)
| (in thousands of | ||||
| EUR) | Land | Buildings | Plant and equipment | Total |
| At 1 January 2022 | ||||
| Cost or deemed cost | 11,062 | 14,452 | 35,711 | 61,225 |
| Accumulated depreciation | - | (10,490) | (23,957) | (34,447) |
| Net book value | 11,062 | 3,962 | 11,754 | 26,778 |
| Year ended 31 | ||||
| December 2022 | ||||
| At 1 January | 11,062 | 3,962 | 11,754 | 26,778 |
| Revalution | 1,108 | - | - | 1,108 |
| Additions | - | 11 | 1,857 | 1,868 |
| Disposals and write-offs | (3,355) | (5) | (374) | (3,734) |
| Depreciation | - | (287) | (2,481) | (2,768) |
| At 31 December | 8,815 | 3,681 | 10,756 | 23,252 |
| At 1 January 2022 | ||||
| Cost or deemed cost | 8,815 | 14,458 | 37,195 | 60,468 |
| Accumulated depreciation | - | (10,777) | (26,439) | (37,216) |
At 1 January 2022
Cost or deemed
cost
Accumulated
depreciation
Net book value
Year ended 31
December 2022
At 1 January
Revalution
Additions
Disposals and
write-offs
Depreciation
At 31 December
At 1 January 2022
Cost or deemed
cost
Accumulated
depreciation
Net book value
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
90
NOTE 17 – PROPERTY, PLANT AND EQUIPMENT (continued)
Company
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.
Plants in the amount of EUR 2,224 thousand were pledged as a means of securing loan repayment on
December 31, 2023 (2022: EUR 2,853 thousand).
As of December 31, 2023, assets under lease where the Group and the Company are lessees amounted
to EUR 68 thousand for the Group, while the Company has no assets under lease (2022: EUR 202
thousand, i.e. EUR 109 thousand).
| Year ended 31 December | ||||
| 2023 | Land | Buildings | Plant and equipment | Total |
| At 1 January | 8,815 | 3,681 | 10,756 | 23,252 |
| Additions | - | 27 | 3,434 | 3,461 |
| Disposals and write-offs | - | (3) | (764) | (767) |
| Depreciation | - | (288) | (1,950) | (2,238) |
| At 31 December | 8,815 | 3,417 | 11,476 | 23,708 |
| At 31 December 2023 | ||||
| Cost or deemed cost | 8,815 | 14,482 | 39,864 | 63,161 |
| Accumulated depreciation | - | (11,065) | (28,388) | (39,453) |
| Net book value | 8,815 | 3,417 | 11,476 | 23,708 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
91
NOTE 18 – 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 EUR)
Land
Buildings
Plant and
equipment
| Plant and | ||||
| (in thousands of EUR) | Land | Buildings | equipment | Total |
| At 1 January 2022 | ||||
| Cost | 790 | 20,687 | 3,199 | 24,676 |
| Accumulated depreciation | - | (16,738) | (1,247) | (17,985) |
| Net book value | 790 | 3,949 | 1,952 | 6,691 |
| Year ended 31 December 2022 | ||||
| At 1 January | 790 | 3,949 | 1,952 | 6,691 |
| Depreciation | - | (460) | (250) | (710) |
| At 31 December | 790 | 3,489 | 1,702 | 5,981 |
| At 31 December 2022 | ||||
| Cost | 790 | 20,687 | 3,199 | 24,676 |
| Accumulated depreciation | - | (17,198) | (1,497) | (18,695) |
| Net book value | 790 | 3,489 | 1,702 | 5,981 |
| Year ended 31 December 2023 | ||||
| At 1 January | 790 | 3,489 | 1,702 | 5,981 |
| Depreciation | - | (453) | (249) | (702) |
| At 31 December | 790 | 3,036 | 1,453 | 5,279 |
| At 31 December 2023 | ||||
| Cost | 790 | 20,687 | 3,199 | 24,676 |
| Accumulated depreciation and impairment losses | - | (17,651) | (1,746) | (19,397) |
| Net book value | 790 | 3,036 | 1,453 | 5,279 |
Total
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
92
NOTE 19 – LEASES
The company leases vehicles under rental agreements.
/ i / Leases recorded in the statement of financial position as at 31 December are as follows:
/ ii / Long-term lease liabilities as at 31 December are as follows:
/ iii / Leases recorded in the statement of comprehensive income are as follows:
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| Right of use assets: | ||||
| Vehicles | 29 | 142 | - | 98 |
| Real estate | - | 11 | - | 11 |
| Equipment | 39 | 49 | - | - |
| 68 | 202 | - | 109 | |
| Lease liabilities: | ||||
| Non-current liabilities | 34 | 149 | - | 96 |
| Current liabilities | 37 | 52 | - | 9 |
| 71 | 201 | - | 105 |
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| From 1 to 2 years | 15 | 41 | - | 9 |
| From 2 to 5 years | 22 | 11 | - | - |
| 37 | 52 | - | 9 |
| Dalekovod Group | Dalekovod d.d. | |||
| (in thousands of EUR) | 2023 | 2022 | 2023 | 2022 |
| Depreciation | 56 | 348 | - | 302 |
| Interest expenses (note 12) | 4 | 16 | - | 11 |
| Lease cost related to short-term lease (note 8) | 7,162 | 3,415 | 7,063 | 5,130 |
| 7,222 | 3,779 | 7,063 | 5,443 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
93
NOTE 19 – LEASES (continued)
/i/ The reversal of impairment in subsidiaries in 2022 in the amount of 265 thousand euros refers
to Dalekovod Adria d.o.o. (note 20). Company Dalekovod Adria d.o.o. it was sold in 2023, and the value
of investments in subsidiaries was reduced in the stated amount.
/ii/ In 2023, Dalekovod OSO d.o.o. was sold by Dalekovod MK d.o.o. to the company Dalekovod
d.d. The purchase price was 4,904 thousand euros. The purchase price is based on the valuation of an
independent appraiser and was also used as a basis for the impairment test the Company performed
for 2023 (see note 20).
| Dalekovod Group 2023 | Dalekovod Group 2022 | Dalekovod d.d. 2023 | Dalekovod d.d. 2022 | |
| (in thousands of EUR) | ||||
| For the year ended 31. December 2022 | ||||
| Opening net book value of lease recognized under IFRS 16 | 1,738 | 1,738 | 952 | 1,150 |
| Accumulated depreciation | (1,536) | (1,188) | (843) | (749) |
| Net book value | 202 | 550 | 109 | 401 |
| Opening net book value | 202 | 550 | 109 | 401 |
| Correction of IFRS 16 | (78) | - | (109) | - |
| Exchange rate | - | - | - | (3) |
| Depreciation | (56) | (348) | - | (302) |
| Closing net book value | 68 | 202 | - | 96 |
| At 31 December 2023 | ||||
| Cost | 1,660 | 1,738 | 843 | 952 |
| Accumulated depreciation | (1,592) | (1,536) | (843) | (843) |
| Net book value | 68 | 202 | - | 109 |
| Dalekovod d.d. | ||
| (in thousands of EUR) | 2023 | 2022 |
| At 1 January | 6,491 | 6,226 |
| Reversal of impairment /i/ | - | 265 |
| Acquistion of Dalekovod OSO /ii/ | 4,904 | - |
| Sale of Adria d.o.o. /i/ | (265) | - |
| At 31 December | 11,130 | 6,491 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
94
NOTE 20 – INVESTMENTS IN SUBSIDIARIES (continued)
At 31 December 2023, the Company owns shares in the following subsidiaries:
In 2023, Dalekovod Adria d.o.o., which had no operational business, was sold. The positive effects of sales are manifested at the level of Dalekovod d.d. in the
amount of 91 thousand euros. In 2023, Dalekovod MK d.o.o. sold shares in Dalekovod OSO d.o.o. to the parent company Dalekovod d.d.. The transaction was
carried out based on the estimated market value of the company Dalekovod OSO., with the aim of harmonizing the management structure of the Group. Cindal
d.o.o. was also closed in BiH.
| Name | Country of incorporation | Primary activity | 2023 | Investment | Impairment | Net investment |
| % | (in thousands of EUR) | |||||
| Dalekovod d.o.o., Ljubljana | Slovenia | Construction | 100.00 | 275 | - | 275 |
| Dalekovod d.o.o., Mostar | Bosnia and Herzegovina | Construction | 100.00 | 28 | - | 28 |
| Dalekovod MK d.o.o., Velika Gorica | Croatia | Production | 100.00 | 29,565 | (26,076) | 3,489 |
| Dalekovod-projekt d.o.o., Zagreb | Croatia | Construction | 100.00 | 612 | - | 612 |
| Dalekovod TKS a.d., Doboj | Bosnia and Herzegovina | Production | 97.25 | 2,700 | (2,700) | - |
| Denacco Namibia (PTY) Ltd | Namibia | Construction | 60.00 | 2 | (2) | - |
| Dalekovod OSO d.o.o., Velika Gorica | Croatia | Other | 100.00 | 4,904 | - | 4,904 |
| Dalekovod EMU d.o.o. Zagreb | Croatia | Construction | 100.00 | 1,003 | - | 1,003 |
| EL-RA d.o.o. Zagreb | Croatia | Other | 100.00 | 531 | - | 531 |
| Dalekovod Libya za inženjering, zajedničko poduzeće | Libya | Construction | 65.00 | 117 | (117) | - |
| Dalekovod Ukrajina d.o.o. | Ukraine | Construction | 100.00 | 10 | - | 10 |
| Dalekovod Norge AS | Norway | Construction | 100.00 | 275 | - | 275 |
| Cinčaonica usluge d.o.o. /i/ | Croatia | Other | 100.00 | 3 | - | 3 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
95
NOTE 20 – INVESTMENTS IN SUBSIDIARIES (continued)
At 31 December 2022, the Company owns shares in the following subsidiaries:
Subsidiary company Proizvodnja MK d.o.o. (Dalekovod MK) had in 2022 a 100% share in the company Proizvodnja OSO d.o.o. (Dalekovod OSO).
Name
| Name | Country of incorporation | Primary activity | 2022% | Investment | Impairment (in thousands of EUR) | Net investment |
| Dalekovod d.o.o., Ljubljana | Slovenia | Construction | 100.00 | 275 | - | 275 |
| Dalekovod d.o.o., Mostar | Bosnia and Herzegovina | Construction | 100.00 | 28 | - | 28 |
| Dalekovod MK d.o.o., Velika Gorica | Croatia | Production | 100.00 | 29,565 | (26,076) | 3,489 |
| Dalekovod-projekt d.o.o., Zagreb | Croatia | Construction | 100.00 | 612 | - | 612 |
| Dalekovod TKS a.d., Doboj | Bosnia and Herzegovina | Production | 97.25 | 2,700 | (2,700) | - |
| Denacco Namibia (PTY) Ltd | Namibia | Construction | 60.00 | 2 | (2) | - |
| Cindal d.o.o. Doboj | Bosnia and Herzegovina | Production | 95.01 | 689 | (689) | - |
| Dalekovod-Adria d.o.o. Zagreb | Croatia | Other | 100.00 | 4,261 | (3,995) | 266 |
| Dalekovod EMU d.o.o. Zagreb | Croatia | Construction | 100.00 | 1,468 | - | 1,468 |
| EL-RA d.o.o. Zagreb | Croatia | Other | 100.00 | 65 | - | 65 |
| Dalekovod Libya za inženjering, zajedničko poduzeće | Libya | Construction | 65.00 | 117 | (117) | - |
| Dalekovod Ukrajina d.o.o. | Ukraine | Construction | 100.00 | 10 | - | 10 |
| Dalekovod Norge AS | Norway | Construction | 100.00 | 275 | - | 275 |
| Cinčaonica usluge d.o.o. | Croatia | Other | 100.00 | 3 | - | 3 |
| 40,070 | (33,579) | 6,491 |
Country of incorporation
Primary activity
2022
Investment
Impairment
Net investment
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
96
NOTE 20 – INVESTMENTS IN SUBSIDIARIES (continued)
Recoverability of investments in subsidiaries
In the course of the sale and purchase transaction whereby the Company bought its indirect subsidiary
Dalekovod OSO from its direct subsidiary Dalekovod MK, the Company engaged an independent
external appraiser to estimate the fair value of the companies. The same assessment was used as the
basis for the implementation of the impairment test of investments in subsidiaries for the year 2023.
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 10.66% and 12.66%, depending on the
industry in which the individual entity operates.
In addition to the discounted cash flow method, the Company used the approved plans to test the
impairment of investments in subsidiaries, i.e. the calculation of the recoverable amount, using the
multiplier method. The multiplier method is a relative valuation method that bases the company's
value on similar assets on the market.
Multipliers represent the ratio of the share price (market or transaction) to a certain category per share
(such as net income or book value of common equity). Multipliers of comparable companies and
transactions rely on the so-called the law of one price according to which two identical units of assets
(shares) should be traded at the same prices (multipliers). It is an assessment of the value of an
individual share compared to the average multiplier at which similar shares are valued or traded.
The Company also analysed the sensitivity of the impairment tests with respect to changes in key
assumptions such as the discount rate and terminal growth rate. A reasonable increase (by 50 basis
points) in the weighted average cost of capital (with the terminal growth rate unchanged) would not
have a material impact on the results of the impairment tests for Dalekovod MK and Dalekovod OSO
and neither would a reasonable decrease (by 50 basis points) in the terminal growth rate (with the
weighted average cost of capital unchanged).
NOTE 21 – INVESTMENTS IN ASSOCIATES
Associates are as follows:
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| At beginning of year | 1 | 1 | 1 | 1 |
| At end of year | 1 | 1 | 1 | 1 |
| Associates are as follows: | ||||
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Holding in % 2023 | 2022 |
| TLM Group Members | 1 | 1 | 22-25 | 22-25 |
| Total | 1 | 1 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
97
NOTE 22 – FINANCIAL INSTRUMENTS BY CATEGORY
Group
Financial instruments do not include tax payables, payables to employees, taxes and contributions and
advances received.
| (in thousands of EUR) | Note | 2023 | 2022 |
| Financial assets | |||
| Trade receivables | 25 | 35,483 | 36,960 |
| Receivables by construction contracts | 25 | 20,830 | 17,362 |
| Loans receivable and deposits | 25 | 8,193 | 10,074 |
| Other receivables | 25 | 244 | 6,796 |
| Cash and cash equivalents | 26 | 12,345 | 3,784 |
| Total | 77,095 | 74,976 | |
| Financial liabilities | |||
| Loans | 28 | 5,718 | 2,378 |
| Bonds | 28 | 1,540 | 1,728 |
| Finance lease | 28 | 4,696 | 4,179 |
| Trade payables | 29 | 30,271 | 25,043 |
| Other payables | 29 | 393 | 405 |
| Total | 42,618 | 33,733 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
98
NOTE 22 – 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 EUR) | Note | 2023 | 2022 |
| Financial assets at amortised cost | |||
| Trade receivables | 25 | 30,617 | 35,408 |
| Receivables by construction contracts | 25 | 17,988 | 14,754 |
| Loans receivable and deposits | 25 | 8,447 | 12,731 |
| Interest receivable | 25 | 85 | 99 |
| Other receivables | 25 | 331 | 98 |
| Other receivables | 25 | 164 | 6,745 |
| Cash and cash equivalents | 26 | 10,262 | 2,837 |
| Total | 67,894 | 72,672 | |
| Financial liabilities at amortised cost | |||
| Loans | 28 | 5,909 | 3,327 |
| Bonds | 28 | 2,033 | 2,281 |
| Finance lease | 28 | 4,604 | 4,051 |
| Trade payables | 29 | 25,142 | 23,103 |
| Other payables | 29 | 335 | 307 |
| Total | 38,023 | 33,069 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
99
NOTE 23 – 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 to 0.01%.
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.
For the Swedish market, the specific cumulation of retention value is 5% for each invoice issued, at the
same time this amount is limited to a maximum of 5% of the total contract value.
Other 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 eur 1,792 thousand were permanently written
off due to the impossibility of collecting them.
| Dalekovod Group | Dalekovod d.d. | |||
| (in thousands of EUR) | 2023 | 2022 | 2023 | 2022 |
| Long-term deposits | 919 | 919 | 909 | 909 |
| Long-term guarantee deposits | 5,556 | 4,509 | 5,555 | 4,509 |
| Other long-term receivables | 6 | - | - | - |
| Long-term loans receivable: | ||||
| - housing loans and other loans to employees | 16 | 42 | 13 | 14 |
| - loans to subsidiaries | - | - | 108 | 170 |
| Impairment of long-term deposits and loans receivable | (432) | (221) | (432) | (221) |
| Total long-term deposits and loans receivable | 6,065 | 5,249 | 6,153 | 5,381 |
| Long-term loans and deposits given | 6,065 | 5,249 | 6,153 | 5,381 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
100
NOTE 23 – LOANS AND RECEIVABLES (continued)
Movements in the provision for impairment of long-term deposits and loans receivable are as follows:
Cost of raw materials and supplies recognised in the income statement is disclosed in note 8.
The cost of inventory adjustment recognized in the profit and loss account is shown in note 10. The
cost of inventory adjustment was carried out at Dalekovod MK d.o.o. (123 thousand euros) and
Dalekovod OSO d.o.o. (201 thousand euros), the value of the inventory position in the Statement of
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| At 1 January | 221 | 2,136 | 221 | 2,136 |
| Discount of guarantee deposits | 211 - | (123)(1,792) | 211 - | (123)(1,792) |
| At 31 December | 432 | 221 | 432 | 221 |
| Dalekovod Group | Dalekovod d.d. | |||
| (in thousands of EUR) | 2023 | 2022 | 2023 | 2022 |
| Raw materials | 6,956 | 5,287 | 1,118 | 774 |
| Finished and semi-finished goods and work in progress | 4,233 | 3,443 | - | - |
| Spare parts and small inventories | 1,298 | 725 | 767 | 335 |
| Trade goods | 3,647 | 769 | 579 | 10 |
| Advances for inventories | - | 270 | - | - |
| 16,134 | 10,494 | 2,464 | 1,119 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
101
NOTE 25 – TRADE AND OTHER RECEIVABLES
/i/ Other short-term loans and loans to subsidiaries are with annual interest rates from 0%-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 2023 the effective interest rates for deposits with a contracted
interest rate are 0%-0.01%.
/iv/ In 2022, other receivables included receivables from the Ministry of Finance in the amount of 6,636
thousand euros. In 2023, the Company adjusted the value of the receivable from the Ministry of
Finance/RO from 2016 as described in detail in note 11.
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| Domestic trade receivables | 13,894 | 15,428 | 15,484 | 18,355 |
| Foreign trade receivables | 21,775 | 22,287 | 15,140 | 17,689 |
| Impairment of trade receivables | (186) | (755) | (7) | (636) |
| 35,483 | 36,960 | 30,617 | 35,408 | |
| Receivable from customers for contract work | 20,830 | 17,362 | 17,988 | 14,754 |
| Guarantee deposits – current portion | 1,855 | 4,589 | 1,855 | 4,587 |
| Short-term deposits /iii/ | 221 | 208 | 105 | 70 |
| Loans to subsidiary | - | - | 334 | 2,983 |
| Other short-term loans /i/ | 256 | 239 | 204 | 204 |
| Interest receivable | - | - | 85 | 99 |
| Dividend receivable | - | - | 331 | 98 |
| Other receivables /iv/ | 6,880 | 6,796 | 6,800 | 6,745 |
| Impairment of other financial assets | (6,840) | (211) | (6,840) | (501) |
| Total financial assets | 58,685 | 65,943 | 51,479 | 64,447 |
| Advances /ii/ | 8,250 | 7,700 | 7,352 | 7,122 |
| Receivable from employees | 6 | 14 | 6 | 14 |
| VAT receivable | 2,725 | 1,757 | 2,048 | 1,550 |
| Outstanding VAT receivable | 2 | 286 | 2 | - |
| Prepaid expenses | 903 | 1,297 | 872 | 1,278 |
| Total non-financial assets | 11,886 | 11,054 | 10,280 | 9,964 |
| 70,571 | 76,997 | 61,759 | 74,411 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
102
NOTE 25 – TRADE AND OTHER RECEIVABLES (continued)
The ageing of trade receivables is as follows:
Movements on the provision for impairment of trade receivables and other financial assets are as
follows:
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.
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| Not due | 20,814 | 25,955 | 16,249 | 25,520 |
| Up to 90 days | 9,374 | 4,974 | 6,517 | 3,247 |
| From 91 to 180 days | 875 | 2,136 | 1,749 | 2,378 |
| Over 180 days | 4,420 | 3,895 | 6,102 | 4,263 |
| 35,483 | 36,960 | 30,617 | 35,408 |
| Dalekovod Group | Dalekovod d.d. | |||
| (in thousands of EUR) | 2023 | 2022 | 2023 | 2022 |
| At 1 January | 966 | 12,926 | 1,137 | 12,613 |
| Impairment of trade receivables and other financial assets | 6,714 | 31 | 6,636 | 3 |
| Collected amounts | - | (41) | (290) | (41) |
| Change after adjustment to IFRS 9 | (71) | 35 | (55) | (26) |
| Exchange rate difference | - | (29) | - | (29) |
| Receivables written-off during the year as uncollectible | (583) | (11,956) | (581) | (11,383) |
| At 31 December | 7,026 | 966 | 6,847 | 1,137 |
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| HRK | - | 34,024 | - | 38,484 |
| EUR | 39,465 | 5,763 | 32,769 | 500 |
| NOK | 3,500 | 6,251 | 3,213 | 5,990 |
| SEK | 7,879 | 11,752 | 7,694 | 11,560 |
| UAH | 2,728 | - | 2,728 | - |
| Other currencies | 5,113 | 8,153 | 5,075 | 7,913 |
| Total | 58,685 | 65,943 | 51,479 | 64,447 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
103
NOTE 27 – SHAREHOLDERS’ EQUITY
Share capital
The share capital as of December 31, 2023 is EUR 41,247 thousand (December 31, 2022: EUR 54,744
thousand), and is divided into 41,247,193 shares (2022: 41,247,193 shares). The nominal value of one
share is EUR 1.33 (December 31, 2022: EUR 1.33).
The structure of shareholders as at 31 December is as follows:
The majority owner of Dalekovod d.d. is company Napredna energetska rješenja d.o.o.
The founders of the company Napredna energetska rješenja d.o.o. from Zagreb are Končar - Ulaganja
d.o.o. and Construction Line Limited. Company Končar - Ulaganja d.o.o. is wholly owned by Končar –
Elektroindustrije d.d. which is considered the ultimate owner.
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| Cash at bank and petty cash in domestic currency | 5,916 | 1,057 | 4,211 | 909 |
| Cash at bank and petty cash in foreign currency | 6,429 | 2,727 | 6,051 | |
| 12,345 | 3,784 | 10,262 |
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| EUR | - | 923 | - | 207 |
| NOK | 1,657 | 513 | 1,657 | 513 |
| SEK | 4,246 | 884 | 4,245 | 884 |
| UAH | 21 | 24 | 10 | 6 |
| Other currencies | 505 | 383 | 139 | 318 |
| Total | 6,429 | 2,727 | 6,051 | 1,928 |
| Number of share | s | Holding | ||
| 2023 | 2022 | 2023 | 2022 | |
| Napredna energetska rješenja d.o.o. | 31,000,000 | 31,000,000 | 75.16% | 75.16% |
| Financial institutions | 9,144,753 | 7,004,080 | 22.17% | 16.98% |
| Foreign company | 3,928 | 2,401,233 | 0.01% | 5.82% |
| Individuals | 463,956 | 200,729 | 1.12% | 0.49% |
| Treasury shares | 988 | 988 | 0.00% | 0.00% |
| Others | 633,568 | 640,163 | 1.54% | 1.55% |
| 41,247,193 | 41,247,193 | 100% | 100% |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
104
NOTE 27 – SHAREHOLDERS’ EQUITY (CONTINUED)
Capital reserves
By the decision of the General Assembly of the company from June 12, 2023, the share capital of the
company was reduced from the amount of 54,744,432.94 euros, by the amount of 13,497,239.94
euros, to the amount of 41,247,193.00 euros, and the amount of 13,497 .239.24 euros, by which the
share capital was reduced, was distributed as follows: the amount of 1,110,300.75 euros to cover the
transferred loss of the Company from previous years and the rest in the amount of 12,386,939.19
euros was entered into the company's capital reserves.
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 2023, the Company owns 988 treasury shares (2022: 988 treasury shares).
Statutory and other reserves
Statutory and other reserves consist of reserves for own shares in the amount of EUR 1,124 thousand
(2022: EUR 1,124 thousand).
Revaluation reserves
In 2022, the land in Žitnjak was revalued and increased by 909 thousand euros (assets increased by
1,108 thousand euros). The land in Dugi Selo ceases to be owned by Dalekovod d.d. these revaluation
reserves were reduced by 239 thousand euros.
The fair value of the land at the Žitnjak location was determined using the income and comparative
method. The area calculation used in the calculation corresponds to the area calculation of comparable
properties.
In 2023, there were no significant changes that would indicate the need for additional land value
correction.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
105
NOTE 28 – BORROWINGS
Gross liabilities under the Lease liabilities – minimum lease payments:
Of the total amount of loans from banks and subsidiaries reported by the Company and the Group as
of December 31, 2023, part of the debt in the amount of EUR 953,000 relates to a bank in Norway that
has a lien on the Company's movable property up to a total value of EUR 2,224,000 ( NOK 25 million).
| (in thousands of EUR) | Average interest rate | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| Non-current | |||||
| Loans from banks and subsidiaries | 4.15% | 3,131 | - | 3,131 | - |
| Bonds | 4.00% | 1,345 | 1,540 | 1,776 | 2,033 |
| Finance lease /i/ | 6.01% | 3,330 | 2,974 | 3,280 | 2,897 |
| 7,806 | 4,514 | 8,187 | 4,930 | ||
| Current | |||||
| Loans from banks and subsidiaries | 4.15% | 2,587 | 2,378 | 2,778 | 3,327 |
| Commercial papers | 4.00% | 195 | 188 | 257 | 248 |
| Finance lease /i/ | 6.01% | 1,366 | 1,205 | 1,324 | 1,154 |
| 4,148 | 3,771 | 4,359 | 4,729 | ||
| Total borrowings | 11,954 | 8,285 | 12,546 | 9,659 |
| Dalekovod Group | Dalekovod d.d. | |||
| (in thousands of EUR) | 2023 | 2022 | 2023 | 2022 |
| Up to 1 year | 1,374 | 1,229 | 1,323 | 1,178 |
| Between 1 to 5 years | 3,330 | 2,974 | 3,281 | 2,897 |
| 4,704 | 4,203 | 4,604 | 4,075 | |
| Future finance costs under finance lease | (8) | (24) | - | (24) |
| Present value of liabilities under finance lease | 4,696 | 4,179 | 4,604 | 4,051 |
(in thousands of EUR)
Up to 1 year
Between 1 to 5 years
Future finance costs under finance
lease
Present value of liabilities under
finance lease
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
106
NOTE 28 – BORROWINGS (continued)
The Group's loans in the amount of EUR 8,454 thousand (2022: EUR 6,557 thousand) are exposed to
interest rate changes, since the contractual interest rate is variable. Other loans in the amount of EUR
3,500,000 have a fixed interest rate and relate to bonds and part of financial leasing obligations. (year
2022: 1,728 thousand euros).
The interest rate for the bonds is a fixed 4%, for the loan granted to the Dalekovod NUF branch with a
repayment term until the end of 2024, the currently valid interest rate is 10.98%, the variable interest
rate for the financial lease is between 5.78%-6.76% , while the fixed interest rate for financial lease is
5.85%-6.55%.
Movement in the borrowings for the Group:
(in thousands of EUR)
| (in thousands of EUR) | Loans and bonds | Finance lease | Total |
| At 1 January 2022 | 44,909 | 6,402 | 51,311 |
| Cash receipts | 963 | - | 963 |
| Loan repayments | (38,076) | - | (38,076) |
| Bond redemption | (180) | - | (180) |
| New leases | - | 1,492 | 1,492 |
| Lease repayment | - | (3,583) | (3,583) |
| Other non-monetary items | (3,355) | - | (3,355) |
| Exchange rate differences | (155) | (132) | (287) |
| At 31 December 2022 | 4,106 | 4,179 | 8,285 |
| At 1 January 2023 | 4,106 | 4,179 | 8,285 |
| Cash receipts | 4,900 | - | 4,900 |
| Loan repayments | (1,332) | - | (1,332) |
| Bond redemption | (188) | - | (188) |
| New leases | - | 1,923 | 1,923 |
| Lease repayment | - | (1,069) | (1,069) |
| Other non-monetary items | - | (109) | (109) |
| Exchange rate differences | (228) | (228) | (456) |
| At 31 December 2023 | 7,258 | 4,696 | 11,954 |
At 1 January 2022
Cash receipts
Loan repayments
Bond redemption
New leases
Lease repayment
Other non-monetary items
Exchange rate differences
At 31 December 2022
At 1 January 2023
Cash receipts
Loan repayments
Bond redemption
New leases
Lease repayment
Other non-monetary items
Exchange rate differences
At 31 December 2023
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
107
NOTE 28 – BORROWINGS (continued)
Movement in the borrowings for the Company:
The borrowings are denominated in the following currencies:
The maturity of long-term borrowings is as follows:
| (in thousands of EUR) | Loans and bonds | Finance lease | Total |
| At 1 January 2022 | 47,116 | 6,213 | 53,329 |
| Cash receipts | 963 | - | 963 |
| Loan repayments | (38,744) | - | (38,744) |
| Bond redemption | (238) | - | (238) |
| New leases | - | 1,492 | 1,492 |
| Lease repayment | - | (3,511) | (3,511) |
| Other non-monetary items | (3,355) | - | (3,355) |
| Exchange rate differences | (134) | (143) | (277) |
| At 31 December 2022 | 5,608 | 4,051 | 9,659 |
| At 1 January 2023 | 5,608 | 4,501 | 9,659 |
| Cash receipts | 4,900 | - | 4,900 |
| Loan repayments | (1,332) | - | (1,332) |
| Bond redemption | (248) | - | (248) |
| New leases | - | 1,923 | 1,923 |
| Lease repayment | - | (1,035) | (1,035) |
| Other non-monetary items | (745) | (109) | (854) |
| Exchange rate differences | (241) | (226) | (467) |
| At 31 December 2023 | 7,942 | 4,604 | 12,546 |
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| EUR | 8,237 | 762 | 8,829 | 1,703 |
| HRK | - | 1,226 | - | 1,448 |
| NOK | 3,689 | 6,297 | 3,689 | 6,508 |
| Other | 28 | - | 28 | - |
| Total | 11,954 | 8,285 | 12,546 | 9,659 |
| (in thousands of EUR) | 2023 | 2022 | 2023 | 2022 |
| Between 1 to 5 years | 3,131 | - | 3,131 | - |
| 3,131 | - | 3,131 | - |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
108
There are no long-term obligations to suppliers in 2023.
The Group's and the Company's short-term financial liabilities are denominated as follows:
| Dalekovod Group | Dalekovod d.d. | |||
| (in thousands of EUR) | 2023 | 2022 | 2023 | 2022 |
| Domestic trade payables | 16,339 | 13,204 | 15,567 | 13,380 |
| Foreign trade payables | 13,93230,271 | 11,839 25,043 | 9,57525,142 | 9,723 23,103 |
| Interest payable | 96 | 85 | 164 | 171 |
| Other accruals and liabilities | 297 | 320 | 171 | 136 |
| Financial liabilities | 30,664 | 25,448 | 25,477 | 23,410 |
| Advances | 13,017 | 10,442 | 10,450 | 9,502 |
| Deferred income | 5,513 | 5,312 | 5,414 | 5,312 |
| Accrued expenses | 906 | 200 | 906 | 200 |
| Due to employees | 2,808 | 2,896 | 2,238 | 2,389 |
| VAT payable | 259 | 1,595 | 129 | 1,072 |
| Taxes and contributions | 941 | 634 | 614 | 381 |
| Unused vacation days | 638 | 583 | 382 | 373 |
| Other current liabilities | 70 | 71 | 66 | 66 |
| Non-financial liabilities | 24,152 | 21,733 | 20,199 | 19,295 |
| 54,816 | 47,181 | 45,676 | 42,705 |
| (in thousands of EUR) | Dalekovod Group2023 | 2022 | Dalekovod d.d.2023 | 2022 |
| HRK | - | 13,578 | - | 13,705 |
| EUR | 22,889 | 3,649 | 18,127 | 1,855 |
| NOK | 893 | 1,725 | 891 | 1,781 |
| SEK | 2,665 | 620 | 2,410 | 620 |
| UAH | 2,461 | 5,406 | 2,461 | 5,406 |
| Other currencies | 1,756 | 470 | 1,588 | 43 |
| Total | 30,664 | 25,448 | 25,477 | 23,410 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
109
NOTE 30 – PROVISIONS
Group
Company
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 9.05% for the Group, and 11.8% for the Company (2022: Group 9.18%, 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 (2022.: 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 refer to provisions for legal disputes in the amount of EUR 2,847 thousand for the Group
and EUR 2,834 thousand for the Company (2022: EUR 2,812 thousand for the Group and EUR 2,779
thousand for the Company).
| (in thousands of EUR) | Jubilee awards | Severance payments | Other provisions | Total |
| At 1 January 2023 | 235 | 354 | 2,811 | 3,400 |
| Increase | - | 457 | 56 | 513 |
| Decrease | (16) | (2) | (20) | (38) |
| At 31 December 2023 | 219 | 809 | 2,847 | 3,875 |
| Analysis: | 2023 | 2022 | ||
| Non-current portion | 3,286 | 3,275 | ||
| Current portion | 589 | 125 | ||
| Total | 3,875 | 3,400 | ||
| Company | ||||
| Jubilee | Severance | Other | ||
| (in thousands of EUR) | awards | payments | provisions | Total |
| At 1 January 2023 | 132 | 246 | 2,779 | 3,157 |
| Increase | - | 316 | 55 | 371 |
| Decrease | (15) | (33) | - | (48) |
| At 31 December 2023 | 117 | 529 | 2,834 | 3,480 |
| Analysis: | 2023. | 2022. | ||
| Non-current portion | 3,077 | 3,062 | ||
| Current portion | 403 | 95 | ||
| Total | 3,480 | 3,157 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
110
NOTE 31 – 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 20, associates
presented in note 21, the Company’s related parties include its Management Board, Executive
Directors, their related parties.
Transactions with related companies also include the owner of Napredna energetska rješte d.o.o. and
its founders Končar – Ulaganja d.o.o. and Construction Line Limited as well as their associated
companies. Končar – Ulaganja d.o.o. is wholly owned by Končar – Elektroindustrije d.d. which is
considered 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:
During 2023, other operating expenses with related parties through members of the Supervisory Board
amounted to 9 thousand euros for the Company and 13 thousand euros for the Group.
| (in thousands of EUR) | 2023 | 2022 |
| Sales revenue | 4,071 | 730 |
| Rental income | 777 | |
| Interest income | 62 | 67 |
| Other finance income | 91 | - |
| Dividend income | 978 | 280 |
| Interest income | 1,195 | |
| 7,174 | ||
| Cost of raw materials and supplies | 7,930 | |
| Subcontractor services | 792 | 507 |
| Other staff costs | 198 | - |
| Other operating expenses | 68 | - |
| Interest expense and foreign exchange losses | 37 | 43 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
111
NOTE 31 – RELATED PARTY TRANSACTIONS (continued)
Receivables, payables and loans
(in thousands of EUR)
| (in thousands of EUR) | 2023 | 2022 |
| Trade receivables | 7,006 | 8,360 |
| Receivables for profit share | 331 | 98 |
| Impairment of trade receivables | (2,074) | (2,065) |
| Short-term deposits | 38 | - |
| Interest receivable | 85 | 99 |
| Advances | 842 | 841 |
| Loans receivable | 733 | 3,166 |
| Impairment of loans receivable | (292) | (502) |
| 6,669 | 9,997 | |
| Trade payables | 3,525 | 3,717 |
| Interest payable | 79 | 87 |
| Other accruals and liabilities | 27 | 51 |
| Bonds | 493 | 553 |
| Loans payable | 191 | 949 |
| 4,315 | 5,357 | |
| The company's transactions with Končar Group companies: | ||
| Revenues and expenses | ||
| (in thousands of EUR) | 2023 | 2022 |
| Sales revenue | 1,438 | 955 |
| 1,438 | 955 | |
| Cost of raw materials and supplies | 753 | 22 |
| Subcontractor services | 514 | 24 |
| Other operating expenses | 40 | 55 |
| Other staff costs | 2 | - |
| 1,309 | 101 | |
| Receivables, payables and loans | ||
| (in thousands of EUR) | 2023 | 2022 |
| Trade receivables | 423 | 154 |
| Advances | 380 | - |
| 803 | 154 | |
| Trade payables | 785 | 109 |
| 785 | 109 |
Trade receivables
Receivables for profit share
Impairment of trade receivables
Short-term deposits
Interest receivable
Advances
Loans receivable
Impairment of loans receivable
Trade payables
Interest payable
Other accruals and liabilities
Bonds
Loans payable
The company's transactions with Končar Group companies:
Revenues and expenses
(in thousands of EUR)
Sales revenue
Cost of raw materials and supplies
Subcontractor services
Other operating expenses
Other staff costs
Receivables, payables and loans
(in thousands of EUR)
Trade receivables
Advances
Trade payables
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
112
NOTE 31 – RELATED PARTY TRANSACTIONS (continued)
Transactions with key management
Key management consists of Management Board, Executive Directors, and Heads of departments, 35
people in total (2022: 28 people). Remuneration to key management at Group’s level amounted to
EUR 3,287 thousand (2022: EUR 1,809 thousand), while remuneration at the level of the Company
amounted to EUR 2,384 thousand (2022: 1,479 thousand).
Remuneration to Supervisory Board in 2023 amounted to EUR 7 thousand (2022.: EUR 52 thousand).
Dalekovod Group transactions with Končar Group companies:
| (in thousands of EUR) | 2023. | 2022. |
| Sales revenue | 1,842 | 1,469 |
| 1,842 | 1,469 | |
| Cost of raw materials and supplies | 753 | 22 |
| Subcontractor services | 549 | 37 |
| Other operating expenses | 42 | 78 |
| Other staff costs | 3 | - |
| 1,347 | 137 | |
| Receivables, payables and loans | ||
| (in thousands of EUR) | 2023. | 2022. |
| Trade receivables | 492 | 190 |
| Advances | 380 | - |
| 872 | 190 | |
| Trade payables | 792 | 136 |
| Advances | - | 14 |
| 792 | 150 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2023
113
NOTE 32 – CONTINGENCIES AND COMMITMENTS
As of December 31, 2023, the Group has concluded contracts whose execution has begun, but has not
been completed. Undertaken obligations at the level of the Group that have yet to arise under these
contracts are estimated at EUR 233,806 thousand (2022: EUR 205,943 thousand).
As of December 31, 2023, the Group and the Company are exposed to potential liabilities on the basis
of issued bank guarantees (as a means of securing payment, ensuring the quality of performed works)
in the total amount of EUR 57,021 thousand and EUR 47,489 thousand (2022: EUR 52,233 thousand
Group and 43,960 thousand euros the Company). The company is additionally exposed as a co-debtor
of subsidiaries in the total amount of EUR 8,814 thousand (2022: EUR 6,478 thousand). The Group and
the Company estimate that it is not certain that there will be a collection of potential liabilities on the
basis of bank guarantees, given that the Group and the Company, as in previous periods, fulfill all
contractual obligations on the basis of projects.
During regular operations, the Group had several court cases, either as a plaintiff or as a defendant. In
the opinion of the Management and legal counsel, a provision is made for those disputes that will
potentially result in a loss (note 30). In addition to the disputes for which a reservation has been
created, there are also court disputes which, according to the Management Board and the legal
NOTE 33 – 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. The impact on the statement of comprehensive income for 2023 is not significant considering
that the result from discontinued operations amounted to 12 thousand euros (2022: 102 thousand
euros) at the Group level, and 80 thousand euros (2022: 54 thousand euros) at at the level of the
Company. Assets and liabilities related to discontinued operations are shown within assets and
liabilities held for sale and are also not significant from the perspective of the Group and the Company.
NOTE 34 – SALE OF SUBSIDIARY COMPANIES
During 2023, the subsidiary Dalekovod Adria d.o.o. was sold.
The impact of the sale of the subsidiary Dalekovod Adria d.o.o. is visible in the position of other
financial income in the amount of 91 thousand euros at the level of the Company and in the amount
NOTE 35 - EVENTS AFTER THE REPORTING DATE
On March 31, 2024, the President of the Management Board ceases to be Mr. Tomislav Rosandić,
and is replaced by Eugen Pajić-Karega, who together with Mr. Tvrtko Zlopaš forms a two-member
Management Board of the Company.
On January 18, 2024, the company Proizvodnja MK d.o.o. changed its name to Dalekovod MK d.o.o.
Follow-up to the first-instance verdict in favor of the Ministry of Finance/Republic of Croatia in the
court case that the Company as a plaintiff is conducting before the Commercial Court in Zagreb for the
collection of the Company's claim in the amount of EUR 6,636,140.42 (for more details see note 11)
and the filing of a legal remedy against the said verdict, on March 25, 2024, the Company received a
decision of the High Commercial Court of the Republic of Croatia, which annulled the first-instance
verdict. However, the court has returned the case to the Commercial Court in Zagreb for a new
decision. Due to the events that unfolded during the year and the legal uncertainties arising therefrom,
the receivable continues to be is held fully impaired by the Company and the Group.