1
CONSOLIDATED
AND SEPARATE
ANNUAL REPORT
2024
CONTENT
Responsibility for Consolidated and Separate Annual Report 4
Management Report 5
- Management Report 5
- Consolidated Sustainability Report of the Dalekovod Group 18
Independent Auditor's Limited Assurance Report on the Consolidated
Sustainability Report
168
Report on the Implementation of the Code of Corporate Governance 172
Independent Auditor's Report to the shareholders of Dalekovod d.d. 183
Consolidated and separate income statement 190
Consolidated and separate statement of other comprehensive income 191
Consolidated and separate statement of financial position 192
Consolidated and separate statement of changes in equity 194
Consolidated and separate statement of cash flows 196
Notes to the financial statements 198
OPERATING REVENUES, EBITDA AND NET PROFIT OF THE GROUP
(MONTHS I-XII OF 2024)
OPERATING REVENUES, EBITDA AND NET PROFIT OF DALEKOVOD D.D.
(MONTHS I-XII OF 2024)
OPERATING REVENUE
€195.8 million
EBITDA
€12.5 million
PROFIT FOR THE PERIOD
€6.1 million
OPERATING REVENUE
€138.3 million
EBITDA
€7.1 million
PROFIT FOR THE PERIOD
€2.6 million
4
STATEMENT OF RESPONSIBILITY OF THE MANAGEMENT
BOARD
The Management Board is responsible for preparing consolidated financial statements for each
financial year that give a true and fair view of the financial position of the Company and its subsidiaries
(collectively, the "Group"), their operating results and cash flows, in accordance with applicable
accounting standards, and is responsible for the proper keeping of accounting records necessary for
the preparation of financial statements at any time. The Management Board has overall responsibility
for taking available measures to preserve the Group's assets and to prevent and detect fraud and other
irregularities.
Management is responsible for selecting appropriate accounting policies in accordance with applicable
accounting standards and for applying them consistently; making decisions and estimates that are
reasonable and prudent and preparing consolidated financial statements based on the principle of
indefinite operating time, unless the assumption that the Group will continue to operate is
inappropriate. Following the conducted research, the Management Board reasonably expects that the
Group has adequate funds to continue operating for the foreseeable future. For this reason, the
Management Board continues to accept the principle of going concern when preparing consolidated
financial statements.
The Management Board is also responsible for the preparation and publication, in accordance with the
Accounting Act and other laws and regulations related to the preparation and publication of the Annual
Report applicable in Croatia:
• the Management Report, which includes the Sustainability Report;
• Report on the implementation of the Code of Corporate Governance; and
• Annual consolidated financial statements in a single electronic reporting format.
The Company's separate financial statements were issued separately, at the same time as the
consolidated financial statements.
The Management Report, which includes the Sustainability Report, the Report on the Application of
the Code of Corporate Governance as well as the annual consolidated financial statements in a single
electronic reporting format, were jointly approved and signed by the Management Board on 15 April
2025 for submission to the Supervisory Board.
5
MANAGEMENT REPORT
Key messages
2024 was a very successful year for Dalekovod d.d. and Dalekovod Group. The industry in which
Dalekovod Group competes shows a significant boom and exceptional dynamics for several key
reasons: (i) the green and digital transition, the shift towards renewable energy sources and the
general trend of transition from energy produced from traditional fossil sources to electricity produced
from renewable sources requires an increase in transmission and distribution capacities and
electrification of transport (ii) the transmission network is relatively old and requires renewal; (iii) as a
result of the processes referred to in (i) and (ii), strong tender activity in energy and transport
infrastructure continues, with a high level of predictability, both through the implementation of NRRP
projects in the Republic of Croatia and through strong investment activity of other key investors in all
markets in which Dalekovod Group operates; (iv) although the situation on the materials and raw
materials market is stabilised, it exacerbates certain risks due to overall geostrategic and economic
instabilities and requires continuous monitoring and a rapid response to changed circumstances.
Although macroeconomic and geopolitical circumstances always call for caution, in all markets in which
Dalekovod Group operates (Croatia, Sweden, Norway, Slovenia, Bosnia and Herzegovina, Macedonia,
Germany and the Middle East) there is therefore an increase in business and investment activities in
our business segment.
In these circumstances, Dalekovod Group is successfully positioning, and the progress of business is
particularly noticeable in tender activities and new contracting. As of December 31, 2024 the Group
had a Contract Book in the amount of EUR 415 million (EUR 134 million more than at the end of 2023),
which has a positive impact on the business outlook in the next period. There were significant
contracts in all markets, and we can especially highlight the projects: reconstruction of the 110 kV
transmission line Hudo – Kočevje in Slovenia (contract value ~14 million EUR), procurement of
equipment and construction of the 110/20 kV Kamez substation in Albania (contract value ~13 million
EUR), construction of the 400 kV transmission line Skogssätter – Kilanda in Sweden (contract value ~40
million EUR), construction of the 420 kV transmission line Blåfalli-Gismarvik in Norway (contract value
~63 million EUR), maintenance contract with HOPS (contract amount ~EUR 10 million) and in particular
the reconstruction of the Landesbergen – Borken transmission line in Germany, as it represents the
first contract directly with a transmission system operator in Germany (contract value ~EUR 32 million).
As a result of such a better business and market position, at the Group level in 2024 an increase in
operating revenues of 17 percent was recorded compared to the same period of the previous year,
and they amounted to EUR 195.8 million. Almost all components of the Group contributed positively
to this growth.
6
The Group's EBITDA in the reporting period amounted to EUR 12.5 million and was higher by EUR 11.3
million compared to the previous period.
The positive results of the Group's business activities are mostly due to the dynamics of
implementation, the high level of contracted deals and increased efficiency on projects. Such positive
trends are expected to continue in the coming period.
Guided by these expectations, during 2024 the reorganization of the remuneration system was
completed in Dalekovod d.d., with a significant increase in salaries with the main goal of retaining key
employees and attracting new experts, and the implementation of a transparent reward system.
These processes will continue throughout 2025, especially in the components of the Group, and thus
prove that the phrase "people are the most important" is not just a phrase for us.
With the implementation of the recapitalization and the financial and operational restructuring,
Dalekovod Group continues a new development phase in which it can use all previous experience,
acquired knowledge and proven successful implementation of complex projects with synergy effects
within the Končar Group.
The Dalekovod Group will increase investments in sustainable development with the aim of achieving
a balance between the environment, society and our activities in order to meet the requirements of
development, without jeopardizing the prospects of future generations, whereby it is worth
emphasizing that the projects that the Dalekovod Group is implementing in both the field of Energy
and Infrastructure directly contribute to the realization of the goals of the green transition.
In conclusion, we believe that changes are a prerequisite for success and survival, that communication
and cooperation are the basis of success, and the personal relationship of each of our employees to
the quality of work and to property, tools and machinery is the way to achieve long-term sustainable
successful business. And most importantly, everything we do, we do in a safe wayspan>ore, we will
continue to invest significantly in the health and safety of our employees, education and training, and
the improvement of procedures and methods of performing our activities in the field.
7
Financial result for 2024
Indicators(in 000
EUR)
Dalekovod Group Dalekovod d.d.
2024 2023
Index
2024 2023
Index
Operating income
195,847
167,819
117
138,301
122,353
113
Sales revenue
194,489
165,790
117
135,154
119,637
113
Operating expenses (187,364) (170,100) 110 (134,733) (127,045) 106
Depreciation and
amortization
(4,027) (3,451) 117 (3,575) (3,060) 116
EBITDA
12,510
1,170
+11,340 €
7,143
(1,631)
+8,774 €
EBIT 8,483 (2,281) +10,763 € 3,568 (4,691) +8,259 €
Net profit
6,067
(3,198)
+9,265€
2,616
(4,666)
+7,282 €
Discontinued
operations*
- (12) +12 € - (80) +80 €
Net profit (loss) after
discontinued
operations
6,067 (3,210) +9,277 € 2,616 (4,746) +7,362 €
EBITDA margin 6.4% 0.7% 5.2% -1.3%
*In accordance with international financial standards, the items of the profit and loss account and the statement of financial
position of the Group and the Company in the previous period, i.e. in 2023 and also in 2024 were adjusted for the financial
effect of the aforementioned transaction, i.e. discontinued operations.
The Group's operating revenues in 2024 amounted to EUR 195.8 million and are higher by 17 percent
compared to the same period of the previous year, while the Company's operating revenues amounted
to EUR 138.3 million and are higher by 13 percent compared to the same period of the previous year.
EBITDA (operating income - operating expenses + depreciation) at the Group level amounted to EUR
12.5 million, which represents an increase of EUR 11.3 million compared to the same period of the
previous year, mainly as a result of increased activity and improved efficiency and profitability of
operations in all segments of the Group.
The Group's EBITDA margin increased from 0.7 percent in 2023 to 6.4 percent in 2024. EBITDA at the
level of the Company amounted to EUR 7.1 million, which represents an increase of EUR 8.7 million
compared to the same period of the previous year.
The net profit after the discontinued operations of the Group in 2024 amounts to EUR 6.1 million,
while the net profit after the discontinued operations of the Company amounts to EUR 2.6 million.
Positive indicators and trends in business recovery are the basis for an optimistic outlook ahead.
8
Financial position of the Group
Dalekovod Group Dalekovod Group Dalekovod d.d.
(in 000 EUR)
2024 2023
Index
2024 2023
Index
ASSETS
156,441 137,929 113
132,729 121,716 109
Non-current assets
42,569 38,630 110 47,255 47,027 100
Current assets
113,872 99,299 115
85,474 74,689 114
Inventory
16,189 16,134
100
2,358 2,464
96
Trade and other receivables
85,020
70,571
120
73,126
61,759
118
Current tax assets
335 243
138
298 204
146
Cash and cash equivalents
12,328
12,345
100
9,692
10,262
94
Assets held for sale
- 6
-
- -
-
EQUITY AND LIABILITIES
88,130
75,777
116
74,820
66,423
113
Provision
6,614 3,875 171
6,162 3,480 177
Long-term liabilities
9,218
9,212
100
9,433
9,593
98
Long-term borrowings
7,812 7,806
100
8,027 8,187
98
Deferred tax liabilities
1,406
1,406
100
1,406
1,406
100
Short-term liabilities
72,298 62,690 115
59,225 53,350 111
Short-term borrowings
5,021
4,148
121
5,224
4,359
120
Trade and other payables
65,489 54,816
119
52,447 45,676
115
Corporate income tax liability
1,788
3,685
49
1,554
3,315
47
Liabilities held for sale
- 41
-
-
-
-
Equity
68,311
62,152
110
57,909
55,293
105
Share capital
41,247 41,247
100
41,247 41,247
100
Capital reserves
12,387
12,387
100
12,387
12,387
100
Legal reserves
22 22
100
-
-
-
Own shares
(1,124)
(1,124)
100
(1,124)
(1,124)
100
Statutory and other reserves
5,453 5,453
100
1,124 1,124
100
Revaluation reserves
6,405
6,405
100
6,405
6,405
100
Translation reserves
(647) (739)
88
- -
-
Retained earnings/(Accumulated Loss)
4,568
(1,499)
(305)
(2,130)
(4,746)
45
9
Type of financial debt (in 000
EUR)
Dalekovod Group
Dalekovod d.d.
2024 2023
Index
2024 2023
Index
Lease liabilities
7,452
4,699
159
7,258
4,604
158
Bonds
1,345
1,540
87
1,776
2,033
87
Bank loans 4,035 5,717 71 4,217 5,909 71
Total financial debt
12,833
11,956
107
13,251
12,546
106
Cash
12,328
12,345
100
9,692
10,262
94
Net financial debt
505
(389)
(130)
3,559
2,284
156
The financial position of the Group and the Company after the recapitalization in 2022 is stable, and
the changes are the result of increased business activities and the result of investments in the
reconstruction and expansion of capacity for the implementation of newly contracted projects.
Therefore, the increase in long-term liabilities compared to 31 December 2023 is mostly influenced by
the increase in lease liabilities for newly purchased machinery and transport vehicles, and in February
2024 the regular instalment of bond payments was due, which reduced the debt on bonds compared
to 31 December 2023.
10
Overview of the Group's key segments
During 2024 the Energy project implementation segment (construction of transmission lines and
substations) recorded a 7% increase in revenues compared to the same period last year, and total
revenues amount to EUR 109 million.
The construction of transmission lines is currently active on 27 large projects (4 in Norway, 5 in Sweden,
4 in the region, 3 in Germany and 11 in Croatia) and 4 smaller projects, and substations on 8 (2 in
Croatia, 5 in Macedonia and 1 in Ukraine).
The segment of Infrastructure project realization recorded a 45% increase in revenue compared to
the same period of the previous year, and total revenues amount to EUR 27 million. There are currently
5 active projects. The most important investors are HŽ Infrastruktura and Hrvatske ceste, and a
significant increase in revenues was influenced by the project "Works on equipping a part of the Omiš
bypass, section DC70 – Cetina bridge – Omiš – east". On the Dugo Selo – Križevci project, Dalekovod
d.d. took over the works from DIV Grupa d.o.o. and the works were significantly intensified in order to
complete the project within the newly established deadlines.
The production segment is realized through two companies - Dalekovod MK d.o.o. and Dalekovod
OSO d.o.o.
The company Dalekovod OSO d.o.o. is in 2024. produced/processed 2096 tons of equipment, which
is 6% more than in the same period of the previous year. The operating revenues of Dalekovod OSO
d.o.o. in 2024 are higher by 16% compared to the same period of the previous year, which is the result
of a different structure of contracted projects compared to the previous year. The realized EBITDA is
higher by 40% compared to the same period last year, which is the result of the realization of projects
contracted with a higher margin. Given the increased investment activities on the market, there is still
a positive trend of increasing the contracting of new business, and accordingly, a significant investment
cycle of investments in new machinery has been launched.
The company Dalekovod MK d.o.o. had challenges in the realization in 2024 and in the part of revenue
and profitability, partly under the influence of machine downtime, but more significantly under the
influence of the slow realization generated from Dalekovod d.d., which was not compensated by the
realization to third clients. Given the achieved result, and taking into account the need for significant
investments in capacity renewal, market circumstances and business projection in the next period, the
value of the business share of Dalekovod MK d.o.o. has been harmonized and an initiative has been
launched with the aim of analyzing optimal strategic options for Dalekovod MK d.o.o., Dalekovod
Group and Končar Group, which are focused on the continuation of value-added business activities,
especially in the part of the steel-lattice structure and creating preconditions for maintaining and
increasing the level of employment and improving material conditions for employees.
11
The design segment related to the activities of Dalekovod Projekt d.o.o. in 2024 recorded a 17%
increase in operating revenues compared to the previous year, and they amount to EUR 6.7 million (in
2023 they amounted to EUR 5.7 million). The increase in revenues is a consequence of the activation
of domestic contracts (growth of 26% compared to the previous period). Taking into account the
cyclical nature of design activities, a satisfactory level of profitability was maintained, and given the
stable level of contracted jobs, the realization for the next period was ensured.
Delekovod Emu d.o.o. operates at locations in Zagreb and Vela Luka and generated revenue of 339
thousand EUR in 2024. The company performs activities in the segment of measurement and testing
of electromagnetic fields of high and low frequencies and calibration of electricity meters. EMF
measurements are a legal obligation for companies that own sources of HF and NF radiation, and
measurements are performed throughout Croatia. The second business segment, the calibration of
meters in its own calibration facility in Vela Luka, is still at the level of HEP's annual needs for the
installation of meters in new facilities, while the complete replacement of old meters with new smart
meters is expected in the coming period.
Dalekovod Ljubljana d.o.o. generated EUR 21 million in revenue in 2024 where the most significant
amount of revenue of EUR 13.75 million comes from the revenue of the 2x110 KV Divača-Pivka-Ilirska
Bistrica project, while EUR 6.15 million comes from the revenue of the 2x110 kV Hudo-Kočevje project.
With the continuation of the implementation of the projects 2x110 kV Divača-Pivka-Ilirska Bistrica and
2x110 kV Hudo-Kočevje, the realization for the next period has been secured. The company's EBITDA
in 2024 amounted to EUR 321 thousand.
In 2024 Dalekovod d.o.o. Mostar generated revenues of EUR 17.4 million, which represents an
increase in revenue of 53% compared to the previous year. The company's EBITDA in that period
amounted to EUR 842 thousand and, in accordance with a significant increase in revenues with a
slightly lower increase in costs, it was higher by 71% compared to the previous year. Significantly higher
revenues are the result of a high degree of contracted work as well as accelerated implementation of
projects contracted during the previous two years. In addition to stable revenues at key clients –
electric power companies – the greatest contribution to a significant increase in revenues is the earlier
faster realization compared to the planned deadlines of contracted built and reconstructed facilities,
and the delivery of medium power and distribution transformers, as well as other equipment, mainly
for substations of various voltage levels for a large number of private RES investors.
12
Company name Operating income EBITDA*
(in 000 EUR)
2024 2023 Index
2024 2023 Index
Dalekovod d.d. 138,301 122,353 113 7,142 (1,632) +8,774 €
Proizvodnja MK d.o.o. 10,344 13,100 79
(925) 798 -1,723 €
Proizvodnja OSO d.o.o. 18,574 15,946 116 2,640 1,885 +755 €
Dalekovod Ljubljana d.o.o. 20,799 14,451 144 321 338 -17 €
Dalekovod Projekt d.o.o. 6,685 5,712 117 266 466 -200 €
Dalekovod Mostar d.o.o. 17,470 11,385 153 842 492 +350 €
Cinčaonica usluge d.o.o.* - 23 0 - (12) +12 €
Dalekovod EMU d.o.o. 339 430 79 (97) 14 -111 €
Other affiliated companies 21 20 105 (12) (10) -2 €
Eliminations (16,686) (15,601) 107 2,332 (1,169) +3,501 €
It's a total group
195,847 167,819 117 12,509 1,170 +11,339 €
*company in liquidation
13
Strategy – business guidelines for the coming periods
The industry in which Dalekovod Group competes is expected to experience a significant boom in the
future for several key reasons: (i) the green and digital transitions and the shift towards renewable
energy sources and the general trend of transition from energy produced from traditional fossil
sources to electricity produced from renewable sources requires an increase in transmission and
distribution capacities and electrification of transport (ii) the transmission network is relatively old and
requires renewal; (iii); As a result of the processes referred to in (i) and (ii), strong tender activity in
energy and transport infrastructure continues.
Also, in all markets in which Dalekovod Group operates (Croatia, Bosnia and Herzegovina, Macedonia,
Germany, Norway, Slovenia, Sweden and the Middle East), there is an increase in business activities
with the expected continuation of strong investment momentum.
Therefore, Dalekovod Group, with its strategy of focusing on energy, railway infrastructure and
equipping tunnels on roads and motorways, while not neglecting other opportunities, is excellently
positioned for relevant market circumstances.
A high level of capitalization and working capital, the Group's structure that achieves control of all
parts of the process, from design, through procurement and production of key components to the
construction itself, and the synergy achievable within the Končar Group, enables this strategy to be
implemented in an efficient and sustainable manner.
The Dalekovod Group will continue to invest significantly in the health and safety of its employees as
well as material conditions and increase investments in sustainable development with the aim of
achieving a balance between the environment, society and our activities in order to meet the
requirements of development, without jeopardizing the prospects of future generations, whereby it is
worth emphasizing that the projects implemented by the Dalekovod Group in both the field of Energy
and Infrastructure directly contribute to the realization of the goals of the green transition.
14
Dalekovod Group
As at 31 December, the Dalekovod Group (the Group) comprises the parent company Dalekovod, d.d.
(hereinafter referred to as the "Company") and eleven subsidiaries owned by the parent company and
one company managed as a joint venture (2023: 12 subsidiaries owned by the parent company and
one company operated as a joint venture) – notes 19 and 20.
The Society was established in accordance with the laws and regulations of the Republic of Croatia.
The Society's headquarters are located in Zagreb at Marijana Čavića 4. The Company's shares are listed
on the Zagreb Stock Exchange.
The main activity of the Company is the design, production, construction and installation of electric
power facilities, road, rail and urban transport facilities and telecommunications infrastructure.
Description of products and services
Dalekovod d.d. has specialized in the execution of contracts on a turnkey basis in the following areas:
• power facilities, especially transmission lines from 0.4 to 750 kV
• transformer stations of all levels and voltage levels up to 500 kV
• air, underground and underwater cables up to 110 kV
• Telecommunications facilities, all types of networks and antennas
• production of suspension and connection 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 for road lighting,
Guardrails and traffic signalling, tunnel lighting and traffic management
• electrification of railway lines and trams
15
Own shares
In 2024 the Company did not acquire its own shares.
Investment in subsidiaries, affiliates and joint ventures
Investments in subsidiaries are presented in more detail in note 20 of the financial statements.
Investments in associates are presented in more detail in note 21 of the financial statements.
Events after the balance sheet date
In 2024 there were no events that required publication.
Objectives and policies related to financial risk and capital risk management
The Company and the Group are exposed to market, price, credit and liquidity risks, which together
with capital risk management are described in detail in Note 3 of the financial statements.
Shareholder structure (as at 31 December 2024)
In accordance with the Company's Articles of Association, the voting rights of shareholders are not
limited to a certain percentage or number of votes, nor are there time limits for exercising voting rights.
Each ordinary share gives the right to one vote at the General Assembly.
The rights and obligations of the Company arising from the acquisition of own shares are exercised in
accordance with the provisions of the ZTD and the Company's Articles of Association.
31.12.2024 31.12.2023 31.12.2024 31.12.2023
Napredna energetska rješenja d.o.o. 31.000.000 31.000.000 75,16% 75,16%
Financial institutions 8.711.743 8.543.017 21,12% 20,71%
Non residents 4.229 3.776 0,01% 0,01%
Individuals 1.443.811 1.630.438 3,50% 3,95%
Own shares 988 988 0,00% 0,00%
Others 86.422 68.974 0,21% 0,17%
Total 41.247.193 41.247.193 100,00% 100,00%
Subject
% of shares
Number of shares
16
Affiliates and subsidiaries
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 of Vela Luka) 30113948970/ 060033055
In 2024 the liquidation of the company CINČAONICA USLUGE u liquidacija d.o.o. was completed.
COMPANIES OUTSIDE THE REPUBLIC OF CROATIA
7. Power Line Plt, Namibia
8. DALEKOVOD TKS a.d., Doboj, Bosnia and Herzegovina (in bankruptcy proceedings, registered in
2019)
9. DALEKOVOD MOSTAR d.o.o., Bosnia and Herzegovina, Ante Starčevića bb, Mostar, BIHJIB:
4227105910001
10. DALEKOVOD LJUBLJANA d.o.o., Zavetiška ul. 1, 10000 Ljubljana, SLO, SI 28940024
11. DALEKOVOD UKRAINE d.o.o., Ukraine, 4 Lunacharskogo str. 02002 Kiev, Ukraine, MBS: 36683014
12. LIBYA ENGINEERING TRANSMISSION LINE, Joint Undertaking, Libya
13. NORGE AS TRANSMISSION LINE, Norway, Sandviksveien 26, 1363 Høvik, Norway, MBS: 998628253
BRANCHES AND REPRESENTATIVE OFFICES
14. NUF Power Line, Norway, Sandviksveien 26, 1363 Høvik, Norway
15. DALEKOVOD Skopje, 50th Division No. 36, Skopje-Center, Skopje, Macedonia
16. TRANSMISSION LINE GERMANY, Germany, Weberstrasse 60, 60318 Frankfurt
17. DALEKOVOD UKRAINE - representative office in Ukraine, 4 Lunacharskogo 02002 Kiev, Ukraine
18. DALEKOVOD - Branch Of Kosovo, Kosovo, St. Garibaldi 3/7, 10000 Prishtine, Kosovo
19. DALEKOVOD D.D. - branch in Sweden c/o Amesto Accounthouse AB, Roselundsgatan 54, 118 63
Stockholm, Sweden
20. DALEKOVOD D.D. Zagreb – Mostar Branch, Ante Starčevića bb, 88000 Mostar
21. DALEKOVOD, d.d., branch office Ljubljana, Zavetiška ulica 1 , 1000 Ljubljana
17
Dalekovod Joint Stock Company for Engineering, Production and Construction
Marijana Čavića 4, 10 000 Zagreb, Croatia
10001 Zagreb, P.P. 128
URL: www.dalekovod.hr, www.dalekovod.com
E-mail: dalekovod@dalekovod.hr
Share capital: EUR 41,247,193.00. Number of shares: 41,247,193
IBAN: HR8323600001101226102 ZABA Zagreb
MBS: 080010093, Commercial Court in Zagreb
MB: 3275531
OIB: 47911242222
Activity code: 4222 (Construction of power lines and telecommunications)
Signed on behalf of the Management Board on 15 April 2025.
______________________ _________________________
Eugen Paić-Karega Tvrtko Zlopaša
President of the Management Board Member of the Management Board
18
SUSTAINABILITY REPORT, DALEKOVOD GROUP
General information
INTRODUCTORY SPEECH BY THE PRESIDENT OF THE MANAGEMENT BOARD 2024
Last year, in 2024 to which this extensive document refers, we celebrated the great 75
years of our company's business, remembered all the historical successes, breakthroughs,
but also challenges, which we faced and overcame. In addition, we reminded ourselves of
all the values that are woven into the foundations of the Dalekovod Group as it is today,
and once again recognized the guidelines for a more successful and sustainable
Dalekovod. It was a year in which we tried, and largely succeeded, to surpass the
achievements of the previous year.
Although crucial, financial indicators are only one of the criteria for success. They are
certainly the result of a well-thought-out strategy and successfully implemented
business activities, but at the center of every success are people – our employees. Their
dedication, competence and daily concern for safety, well-being and sustainable business
are the basis of our achievements. It is thanks to them that we successfully manage
business processes at all levels, taking into account the responsible use of resources,
environmental protection and continuous improvement of working conditions.
Consequently, the report in front of you is not only a summary of our business results, but
also a confirmation of our commitment to sustainability, innovation and responsible
business. As a company with more than 75 years of tradition, we are aware of the
responsibility we have towards our employees, the community and the environment. That
is why Dalekovod systematically and strategically continues to build a sustainable future,
aligning its goals with the European Green Deal and the European Union's ambitions to
become climate neutral by 2050.
This year marked an important step forward – for the first time, we produced a report
according to the European Sustainability Reporting Standards (ESRS), in accordance with
the Sustainability Reporting Directive (CSRD). By doing so, we raise transparency and
accountability in our business to an even higher level, thus enabling all stakeholders to
have a better insight into the impact of our activities on the environment, society and
economy.
With the Dalekovod Sustainability Strategy for 2024-2026, we have set ambitious goals
in key areas – reduction of greenhouse gas emissions, circular economy, energy
efficiency, biodiversity protection, as well as improving working conditions and employee
19
support. We have integrated a dual materiality approach, looking at how our business
affects the environment and society, and how sustainability affects the company's
business results and long-term stability.
In addition, our commitment to improving all business segments and building a more
successful society is manifested through continuous investments in additional training
and education of employees, new partnerships with academic institutions, and initiatives
aimed at strengthening inclusivity and creating equal opportunities for all employees. We
develop green skills within the company, adapt to new market demands and create a
stimulating work environment that attracts and retains young talents.
We pay special attention to responsible resource management and innovations that
reduce our ecological footprint. By investing in renewable energy sources, reducing waste
and optimizing materials in production, we contribute to the achievement of climate goals
and strengthen our competitiveness in the European and global markets.
Our journey towards sustainability, in every sense, never ends. Each new year brings
opportunities to improve our business, further integrate ESG principles and create long-
term value for all our stakeholders.
Sustainability is not just an obligation for Dalekovod – it is an opportunity to develop,
innovate and build a better future for everyone.
Executive summary
Dalekovod Group includes the following six companies:
- Dalekovod d.d.
- Dalekovod EMU d.o.o.
- Dalekovod Projekt d.o.o.
- Cinčaonica usluge d.o.o.
- Dalekovod MK d.o.o.
- Dalekovod OSO d.o.o.
Sustainability strategy
Dalekovod continues its sustainable development and forms strategic guidelines
towards sustainable business. In 2024 great strides have been made in identifying key
topics through a detailed analysis of double materiality and the identification of risks and
opportunities taking into account ESG topics.
The industries in which Dalekovod Group competes expect a significant boom in the future
due to aging transmission network technology that requires renewal and expansion. Also,
20
an increase in the demand for green energy from renewable sources and the transition
from fossil fuels to electricity from renewable sources are expected.
Dalekovod Group also contributes to the UN Sustainable Development Goals through our
nine strategic goals that contribute to a total of six UN goals and sub-goals: SDGs 7, 8, 9,
12, 13, 15 and 16.
UN
Sustainable
Development
Goal
UN Sustainable Development
Goals (SDGs)
Business objectives of
the Dalekovod Group
Material
topics
Indicators from
the GRI
Standard (ESG
indicators)
- 7.2 - Increase the sustainability
of the share of renewable
energy in the global energy mix
by 2030
-
operating in accordance
with the policies and
objectives established
within the quality,
environmental, energy,
risk management systems
-
Project
Management
- Results of
business
GRI 3-3/201-
1/201-2/201-
3/201-4/203-
1/205-1
- Progressively improve global
resource efficiency in
consumption and production by
2030 and strive to decouple
economic growth from nature
and environmental degradation,
in line with the 10-year
framework of programmes on
sustainable consumption and
production, with developed
countries leading the way.
- 8.8. - protect labour rights and
promote a safe working
environment for all workers
- operating in accordance
with the Code of
Corporate Governance of
the Zagreb Stock
Exchange and the Code of
Conduct in the Dalekovod
Group
- business in accordance
with the policies and
objectives established
within the quality, risk,
occupational safety and
safety management
system according to ISO
standards
- Our workers
- Health and
safety
protection
- Responsibilit
y of the
supply chain
to society
and human
rights
GRI 3-3/401-
1/401-2/401-
3/403-1/403-
2/403-3/403-
4/403-5/403-
7/403-8/403-
9/404-1/404-
2/404-3/405-
1/405-2/414-
1
- Develop high-quality, reliable,
sustainable and adaptable
infrastructure, including regional
and cross-border infrastructure,
to support economic
development and human well-
being, with a focus on low-cost
and equitable access for all.
-
operating in accordance
with the policies and
objectives established
within the quality,
environmental, energy, risk
management, occupational
safety and safety
management systems
according to ISO standards
-
Project
Management
- Results of
business
GRI 201-
1/201-2/201-
3/201-4/203-
1/414-1-
- 12.2. - Achieve sustainable
management and efficient use
of natural resources by 2030
- Operating in accordance
with the policies and
objectives established
within the quality,
environmental and energy
-
Project
Management
- Materials &
Raw
Materials
GRI 3-3/301-
1/301-2/306-
3/306-4/306-
5/308-1
21
- 12.5. - by the end of 2030,
significantly reduce waste
generation and increase the
amount of recovered waste
management system
according to ISO standards
- Manages environmental,
social and human rights
impacts by vetting new
suppliers on practices
- Supply Chain
Responsibilit
y -
Environment
- 13.1 – Strengthen adaptability
and capacity to adapt to
climate-related and natural
disaster risks in all countries
-
operating in accordance
with the policies and
objectives established
within the framework of the
environmental and energy
management system
according to ISO standards
- manages environmental,
social and human rights
impacts by vetting new
suppliers on practices;
-
Project
Management
- energy
consumption
- Supply Chain
Responsibility
-
Environment
GRI 3-3/305-
1/305-2/305-
3/305-4
- 15.1 – By the end of 2020,
ensure the conservation,
restoration and sustainable use
of terrestrial freshwater
ecosystems and their
environment, in particular
forests, wetlands and
mountains;
- operating in accordance
with the policies and
objectives established
within the ISO
environmental
management system
- manages environmental,
social and human rights
impacts by vetting new
suppliers on practices;
- implementation of all
measures prescribed in the
decisions on the
acceptability of the project
on the environment and/or
ecological network when
applicable to the
companies of the
Dalekovod Group
- Project
Management
- Materials &
Raw
Materials
- Supply Chain
Responsibilit
y -
Environment
GRI 3-3/303-
3/303-4/303-
5/304-2/308-
1
- 16.5. - significantly reduce
corruption and bribery in all
their manifestations
- 16.6. - develop effective,
accountable and transparent
institutions at all levels
-
operating in accordance
with the Code of Corporate
Governance of the Zagreb
Stock Exchange and the
Code of Conduct in the
Dalekovod Group
-
Results of
business
- Project
Managemen
t
GRI 2-7/2-
16/2-23/2-
26/2-30
The adoption of the Sustainability Strategy was the beginning of a new strategic cycle and
the initial phase of implementing comprehensive changes and initiatives to ensure the
effective integration of environmental, social and governance factors into the business.
This report is in line with the European Sustainability Reporting Standards (ESRS) and
22
represents the next step in the implementation of the strategy and the monitoring of
progress towards achieving sustainable goals year after year.
ESRS 2 – General information
Request for publication of BP-1 – General basis for the preparation of
sustainability reports
Dalekovod d.d. has been a member of the UN Global Compact since 2007, and since 2010
the Reports on Social Responsibility have been published on the website. With our
membership, we have committed ourselves to continuous harmonization and
improvement of business with an emphasis on human rights, labor law, environmental
protection and responsible corporate governance.
This is the first Sustainability Report of the Dalekovod Group, prepared in accordance with
the requirements of the Accounting Act and the European Standard for Sustainability
Reporting (ESRS), which is a standard prescribed by the EU Corporate Sustainability
Reporting Directive (CSRD) and includes all the requirements of Chapter VIII. of the
Accounting Act.
The sustainability report has been prepared on a consolidated basis and the scope of the
consolidation of this sustainability report is the same as for the financial statements.
The report covers the entire value chain of the Dalekovod Group. For a complete overview
of the parts of the value chain that are considered to be material, please refer to chapter
ESRS2 General Information SBM-1 – Strategy, Business Model and Value Chain and
ESRS2 General Information SBM-3 Material Impacts, Risks and Opportunities and their
Interaction with the Strategy and Business Model. The dual materiality assessment
process includes the due diligence process described in international instruments, namely
the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for
Multinational Enterprises. When assessing materiality, impacts and financial materiality,
the criteria set out in ESRS 1 in sections 3.4 and 3.5e were applied
In the sustainability report, Dalekovod Group includes relevant segments of the value
chain (upstream and downstream) that are materially related to its impacts, risks and
opportunities:
1. Scope of materiality assessment
- The assessment of double materiality includes both Dalekovod Group's own
operations and those parts of the value chain (primarily suppliers, subcontractors
23
and partners in the phases of product use) where significant environmental, social
or governance impacts and financial risks and opportunities have been identified.-
Based on the identified priority topics from double materiality, Dalekovod Group
determines specific measures and objectives that address key areas of risk and
opportunities, in line with European sustainability reporting standards.
2. Extension of policies, measures and objectives to the value chain
- All relevant internal policies (e.g. Code of Conduct, Human Rights Policy,
Environmental Policy) also apply to supply chain partners, suppliers and business
associates, especially when it comes to issues of working conditions, respect for
human rights, environmental protection and ethical business.- Goals and action
plans that Dalekovod Group adopts in areas such as decarbonization, saving
resources, security of working conditions or responsible management of suppliers,
also include measures for cooperation, education and involvement of actors in the
value chain, for example through contractual requirements or joint initiatives.
3. Coverage of data and indicators from the value chain
- In terms of reporting on metrics (e.g. indicators related to greenhouse gas
emissions, waste management, product safety, human rights protection or
customer satisfaction), Dalekovod Group includes data from relevant parts of its
upstream and downstream chain, where impacts or risks are assessed as material.
verifiable data by supply chain partners, Dalekovod Group, while respecting
relevant methodologies, uses the best available estimates and work on
strengthening the capacity of suppliers in order to increase the level of accuracy
and reliability.
We did not take advantage of the possibility of omitting specific information that could
relate to intellectual property, know-how or the results of the innovations introduced.
BP-2 Disclosure Request – Disclosures Related to Specific Circumstances
The timeframes used in the report are:
- short-term <1 year
- Medium-term >1-5 years
- long-term >5 years
An exception to this rule is climate resilience analysis and scenario climate risk analysis,
where a longer timeframe applies; for more details, see section E1 Climate change –
Approach and policies.
24
These timeframes have been selected to correspond to the types of activities of the
Dalekovod Group, financial reporting procedures, current internal long-term planning and
the expectations of external stakeholders related to the prediction of climate impacts.
For all material sustainability topics, goals are shown, which describe the short-term
plans of the Dalekovod Group, as well as ambitions that describe medium-term plans.
Long-term goals have also been set for the sustainability topic Climate Impact and
Energy Consumption.
The estimates in the value chain and the sources of the estimate and the uncertainty of
the outcome are described in each relevant section of this Sustainability Report, where
details of their application and calculation methods are provided. Some data related to the
E1-6 disclosure requirement are based on estimates and may therefore be subject to
measurement uncertainty. We are aware that the use of estimated data may result in
certain deviations from actual values, and our estimates depend on the availability and
quality of external data, which may vary depending on the source. In view of the above
circumstances, if significant errors or changes to the disclosures from this report occur,
they will be published in the following period.
We also consider forward-looking information to be uncertain.
Indicators: Thematic standards require the inclusion of quantitative value chain data for
only some indicators. These indicators include
•
greenhouse gas emissions from each significant Scope 3 category (see paragraphs
E1-6 for details).
•
gross GHG emissions from scope 1, 2 and 3 and total GHG emissions. These
emissions require data obtained directly from customers, suppliers, business
partners and other contracting parties involved in certain business relationships. In
accordance with the Standard, if primary information related to the value chain
cannot be collected after reasonable efforts, such information shall be evaluated,
including proxy values, sectoral data and other information from indirect sources.
The following factors contributed to the decision to use the estimated data:
•
complexity – involving a large number of actors for different services and mapping
all actors and all direct and indirect business partners. Also, the quantities of
materials and services that are expressed in different units of measurement.
•
limited availability of effective tools to access and share information on the value
chain;
25
•
a large number of counterparties, including large enterprises, but also small and
medium-sized enterprises (SMEs) that may not have the necessary resources to
easily and quickly provide the information necessary for reporting;
•
The information on the value chain could not have the qualitative characteristics
required by the standard, due to the lack of technical readiness of the participants
in the value chain.
To ensure full coverage of sustainability and ESG reporting across the Consolidated Group,
we apply the following quality hierarchy in our data collection processes:
• Primary data: The preferred data source, i.e. the basis for the highest priority data
collection in the Dalekovod Group, is direct measurement (where applicable at a
location or project) – that is, first-hand data.
• Secondary data: Calculations based on existing information or databases, such as
invoice volumes or industry-specific standards and statistics. This is the second
level, which is used when primary data is not available.
• Estimated data: Calculations based on industrial or scientific estimation methods.
This may include extrapolations based on industry empirical values or estimates
using scientific methodologies. Estimates are used when neither primary nor
secondary data are available.
For the assessment of quantitative value chain indicators (Scope 3 greenhouse gas
emissions), Dalekovod Group has decided to use valuation procedures based on proxy
values and sectoral data. Only suppliers and customers, who account for 80% of the
Dalekovod Group's turnover, were taken into account.
Given that this is the first reporting period to be carried out under the ESRS, all previous
sustainability information is not directly comparable to the current report, nor has it been
revised. This incomparability stems from the differences in methodologies used in past
reports compared to the standardized approach to the ESRS. Precisely because of the
new methodology of data calculation in accordance with the ESRS, the Group has
implemented new ways of collecting data that differ from previous methods, which
enables more precise and detailed reporting, but prevents direct comparisons with
previously published data in annual reports.
The same applies to the publication of reporting errors from previous periods; such
disclosure will not be processed, except for data on the sustainability topic Climate
change and energy consumption, which is published in section E1 Climate change.
26
In addition to following the structure of the ESRS, this Report also includes the disclosure
requirements prescribed by the Accounting Act and the EU Taxonomy as an integral part
of the sustainability report, as prescribed by Chapter VIII of the Accounting Act.
Exemption from the disclosure of information on upcoming events or matters under
negotiation, as provided for in Articles 19(3) and 29a(3) of the Regulation. of Directive
2013/34/EU, was not used in the preparation of this sustainability statement.
Control mechanisms – GOV 1
Composition and diversity of administrative, management and supervisory bodies
GOV-1 Dalekovod Group applies a dual corporate governance system, which includes:
•
General Assembly – represents shareholders and makes key strategic decisions.
•
Supervisory Board – supervises the work of the Management Board and adopts
strategic guidelines.
•
Management – manages the operational business and implements the
sustainability strategy.
Table 1: Composition of administrative, management and supervisory bodies.
ESRS ID
2024
GOV-1_01
Number of executive members of the Management Board
2
GOV-1_02 Number of non-executive members of the Supervisory
Board
5
GOV-1_03
Number of representatives of employees and workers in
the Supervisory Board
1
GOV-1_05
Percentage of diversity by committees:
- Percentage of women in the Management Board
- Percentage of women on the Supervisory Board
0%
0%
Diversity by age groups:
- Board members < 30 years old
- Board members aged 30-49
- Board members aged > 50
0
4
3
GOV-1_06 Gender diversity ratio in committees 0%
GOV-1_07
Percentage of Independent Members
0%
Relevant member experience:
The members of the management and supervisory bodies have many years of experience
in the energy, infrastructure and construction sectors, thus ensuring the strategic
27
management of the Dalekovod Group in accordance with industry requirements and ESG
standards.
Roles and responsibilities of administrative and supervisory bodies
GOV-1
GOV-2 With policies and other documented information, the Management Board of Dalekovod
documents its commitment to management systems. By applying the documents, it
confirms the approach to guiding its employees and subcontractors in the realization of
contractual obligations through the necessary planning, realization of execution,
supervision and evaluation of the performed and all aspects of improvement. All Heads of
Offices/Departments/Services are responsible for establishing, maintaining, supervising
and communicating management systems within their Offices/Departments/Services and
exchanging information with the Management Systems and Environmental Protection
Service.
Management
The Management Board conducts business on the basis of the Companies Act, the Articles
of Association and managerial contracts as determined by the Rules of Procedure of the
Management Board of Dalekovod d.d. The Rules of Procedure were adopted by the
Supervisory Board at the session and were made public. The Rules of Procedure specify
the distribution of competencies and the scope of duties of the President and members of
the Management Board. The Management Board, through membership in supervisory
boards, through the General Meeting and other acts established with the subsidiaries,
coordinates, directs, supervises and monitors the work in the subsidiaries of the
Dalekovod Group. The Rules of Procedure also prescribe rules for the prevention of
conflicts of interest of members of the Management Board, according to which members
may not be guided by personal interest or use business opportunities for personal
purposes when conducting business. Also, the members of the Management Board are
obliged to inform the Supervisory Board and other members of the Management Board
without delay about their personal interest in the affairs of Dalekovod d.d.
The Management Board of Dalekovod d.d. conducts business in accordance with the
Companies Act, the Articles of Association and management contracts. She is responsible
for:
• Implementation of business and sustainability strategies.
• Operational management of the business and oversight of ESG objectives.
• Risk, financial and human resources management
• Review and adoption of the Annual Sustainability Report
28
Management delegates ESG responsibilities through:
• Department for Business Excellence (Quality, Environmental Protection, Health
and Safety at Work and Energy Management).
• Human Resources Management Department (responsible for employee safety
and diversity)
• Office of Corporate Affairs and Communication (Coordination and Editing)
The role of the administration in the management of environmental, social, human rights
and economic impacts:
- Sustainability goals relate to society and human rights, the economy and the
environment, so each of the Management Board members directs, coordinates and
monitors the fulfillment of strategic business goals through activities for which
they are responsible and in charge, and reports on this to other members of the
Management Board and proposes decision-making at meetings.
- The Management Board delegates responsibilities for meeting business goals,
including sustainability goals. The areas of sustainability are managed in the
Department of Business Excellence and the Department of Human Resources
Management, which are under the direct jurisdiction of the Management Board.
- Within the Department of Business Excellence are: Occupational Safety and Health
Department, Quality Assurance and Control Service and Management Systems and
Environmental Protection Department. These organizational units with all other
sectors, departments and services are an inseparable unit in achieving long-term
business sustainability.
Members and expertise of the Management Board of Dalekovod Group:
Eugen Paić-Karega
President
Term of office: 2024-2028
Tomislav Rosandić
Former President
He is no longer a member of the
management board
Tvrtko Zlopaša
Member
Term of office: 2024-2028
Born in 1970. Eugen Paić-Karega
became President of the
Management Board on 1.4.2024.
Education
Bachelor of Economics,
Finance
Born in 1975, Tomislav Rosandić
was the President of the
Management Board from 1. 3.2019
to 31.3.2024
Education
Bachelor of Economics,
Corporate Financial
Management, University
Born in 1971, Tvrtko Zlopaša
became a member of the
Management Board on 1.4.2022
and the mandate lasts until 2028.
Education
Bachelor of Civil
Engineering, University
of Zagreb.
29
University of Zagreb.
Faculty of Economics
and Business
Education and training in
the field of leadership
Education and training in
the field of human
resource management,
management
accounting, personal
skills development
Competences
Financial and
management
management
Risk management
Stakeholder Relationship
Management
People Management and
Development
Process and product
optimization
Other Contributions and
Responsibilities
Member of the
Supervisory Board of
Zane d.o.o. and UniCredit
Bank (BiH)
President of the
Assembly of HROK d.o.o.
Member of the HANFA
Council
of Zagreb. Faculty of
Economics and Business
Certified member of the
supervisory boards of
the Faculties of
Economics and Business
in Zagreb and Split
Certified investment
advisor to HANFA and
the Croatian Association
of Financial Analysts
Competences
Finance
Strategic management
of organizations
Financial, operational
organizational
restructuring
Implementation of
complex projects
Management of post-
integration processes
Risk management
Other Contributions and
Responsibilities
Work on socially
engaged projects
Helping the community
Competences
Budget Management
Development and
implementation of the
strategy
Stakeholder relations
Implementation of
complex projects
Strategic management
of organizations
Financial, operational
organizational
restructuring
Implementation of
complex projects
Management of post-
integration processes
Risk management
Other Contributions and
Responsibilities
Diplomatic skills
Extensive experience in
managing an
organization.
Supervisory Board
The work of the Supervisory Board is regulated by the Rules of Procedure of the Supervisory Board of
Dalekovod d.d. adopted by the Supervisory Board on the basis of the Companies Act and the
Articles of Association of Dalekovod d.d. The Rules of Procedure regulate issues relevant to the
constitution, competences, organization, manner of work and decision-making of the Supervisory
Board, working bodies, commissions and committees within the Supervisory Board, and the
obligation to maintain business secrets.
The Supervisory Board has five members, one of whom is appointed by the shareholder of
Napredna Energetska Rješenja d.o.o., one employee representative in the Supervisory Board is
30
appointed in accordance with the provisions of the Labor Act, and the others are elected by the
General Assembly. In performing the tasks of the Supervisory Board, the Supervisory Board as
well as each member of the Supervisory Board are obliged: to act in the best interest of Dalekovod
d.d., to act in accordance with generally accepted codes such as the Code of Corporate
Governance, to advocate for the prevention of conflicts of interest, to advocate for procedures
that prevent illegal activities and to keep business secrets in accordance with the regulations and
general acts of Dalekovod d.d.
The Supervisory Board supervises the management of the affairs of Dalekovod d.d.,
instructs the auditor to examine the annual financial statements of Dalekovod d.d. and
Dalekovod Group, examines whether the operations are conducted in accordance with the
laws, acts of Dalekovod d.d. and the decisions of the General Assembly, examines the
business results, the correctness of the presentation of the financial and business
situation in the books of Dalekovod d.d. and submits a written report thereon to the
General Assembly, decides on granting consent to the proposal of the Management
Board on the use of profits, etc. The Supervisory Board shall make decisions on the
establishment of the Board.
Its key functions include:
• Audit Committee – oversees financial and ESG reporting.
• Nomination and Remuneration Committee – evaluates remuneration policies.
• Corporate Governance Committee – ensures ESG compliance
• The Supervisory Board ensures continuous monitoring of ESG objectives,
assessment of the materiality of risks and management responsibilities
Members of the Supervisory Board:
Gordan Kolak, President of the Supervisory Board since 31/3/2022
Josip Jurčević, Deputy President from 1/3/2024 to 18/6/2024
Josip Lasić, member from 31/3/2022 to 18/6/2024 and from 19/6/2024
deputy president
Božidar Poldrugač, member from 31/3/2022/-18/6/2024
Damir Spudić, member from 31/3/2022/-18/6/2024
Pavao Vujnovac, member from 31/3/2022/-18/6/2024
Ivan Paić, member since 19/06/2024
Petar Bobek, member since 19/06/2024
Dražen Buljić, member since 31/3/2024
31
General Assembly
The General Assembly shall be convened in cases specified by the Companies Act and the
Articles of Association of Dalekovod d.d., and must be convened when the interests of
society so require. The general meeting must be held in the first eight months of the
financial year. It is convened by the Management Board or the Supervisory Board. The
Management Board of the Company is obliged to convene the General Assembly when
requested by the Supervisory Board or if requested in writing by the shareholders who
jointly hold shares in the amount of the twentieth part of the Company's share capital and
state the purpose and reason for convening the General Assembly. Members of the
Management Board and the Supervisory Board must participate in the work of the
General Assembly. The General Assembly may make valid decisions if the General
Assembly is represented by shareholders who hold more than 50% of the Company's
ordinary shares. Shareholders who meet the prescribed conditions may participate in the
General Assembly. Each share gives the right to one vote. The General Assembly shall be
chaired by the President of the General Assembly. The President of the General Assembly
is the President of the Supervisory Board, if present at the General Assembly. If the
Chairman of the Supervisory Board is prevented, the Deputy Chairman of the Supervisory
Board shall chair the General Assembly.
Strategic sustainability management and ESG expertise
GOV-1 (Related to ESRS 2 GOV-1, par. 23(a-b) and ESRS 2 GOV-2, par. 26(a-c))
GOV-2 Management of ESG topics
The Supervisory Board and the Management Board ensure the oversight of ESG issues
through the following processes:
1. ESG strategy analysis – revision and adaptation of the business model.
2. Identification of material ESG risks and opportunities (DMA)
3. Setting and monitoring policies and goals – adopting ESG strategies and plans.
4. ESG Reporting System – Verification and Approval of the Sustainability Report
Supervision of ESG aspects is carried out through information, consultations and decision-
making in these areas.
The Management Board of Dalekovod Group actively participated in all processes of
determining impacts, risks and opportunities, through the review and approval of significant
stakeholders and relevant topics of the Group in accordance with the requirements of the ESR
standard in November 2024 and through the review and approval of the output results of the
32
dual materiality process, assumed responsibilities over the management process of significant
R&D.
Also, through the dual materiality process and based on key and important topics, the
Management Board adopted the Dalekovod Group Sustainability Policy, which covers all
significant topics of the Dalekovod Group, and the Policy also includes individual policies on
significant topics and demonstrates the commitment of the Management Board of the
Dalekovod Group to sustainability.
The process of double materiality, significant topics, impacts, risks and opportunities emerged
from the process and the sustainability policy have been agreed with the Works Council and the
Supervisory Board of Dalekovod Group.
Setting and monitoring ESG goals
GOV-3 In all management systems, objectives must be policy-related, measurable, take into
account applicable requirements, be monitored and communicated, and revised where
necessary. Likewise, when planning the actions to achieve them, in all management
systems, the organization must determine what will be done, what resources will be
needed, who will be responsible, when it will be completed, how the results will be
evaluated. The Management Board and the Supervisory Board oversee ESG objectives, in
the following ways:
• Through the monitoring of the implementation of the strategy, the goal of reducing
CO₂ emissions and the transition to renewable energy sources is monitored.
• Increasing energy efficiency in operations is monitored through regular surveillance
and certification audits prescribed by the ISO 50001 standard.
• By incorporating ESG criteria into the supply chain.
• By developing sustainable employment and occupational safety programmes
Specific to the Quality Management System, the objectives must be essential for the
compliance of products and services and for increasing customer satisfaction. Given that
the processes and sub-processes defined in the Process Map and described in the
Process Catalogs contribute to the compliance of construction services and increase
customer satisfaction, the goals of each individual process and sub-process are set and
described in the Process Catalogs. At each assessment of the Management Board, the
achievement of goals (targets) is reviewed, and new goals (targets) for the next period are
adopted. Documented information on the objectives of the quality management system is
included as annexes within the Management's assessments. Environmental objectives
shall be allocated to the appropriate functions and levels, taking into account significant
33
environmental aspects, the associated compliance obligations and the associated risks
and opportunities.tag. By establishing plans for the achievement of goals, the distribution
of responsibilities for achieving goals at each level within the organization and resources
is defined, as well as the time frames within which these goals will be achieved.
GOV-3 The Remuneration Policy and the Report on Remuneration of the Management Board and
the Supervisory Board Members shall be published on the website and shall be an integral
part of the invitation to the General Assembly.
Currently, no specific incentives related to sustainability issues are offered for members of
the Management Board of Dalekovod Group. Given that many sustainability issues are
generally integrated into business priorities and goals, and these priorities are included in
incentive systems, sustainability issues are an indirect part of existing incentive programs
that are related to cost reduction through energy reduction, waste reduction and other
efficiency measures prescribed by standards 50001 and 14001 for which the Directorate
is in charge of adopting and controlling through the Directorate's assessments of these
standards.
Due diligence and management of ESG risks
GOV-4 Dalekovod Group carries out the due diligence process through:
• Identification of ESG risk – business impact assessment.
• Stakeholders – engagement with customers, investors and regulators.
• Monitoring the effectiveness of ESG measures – continuous measurement of
progress
Dalekovod Group applies a comprehensive due diligence system to identify and manage
environmental, social and governance risks throughout the entire value chain. This
system is integrated into the assessment of dual materiality, ensuring compliance with
ESRS 2 requirements, CSRD regulations and good industrial practices.
Basic elements of due diligence Related sections in the Sustainability Report
a) Incorporating sustainability-
related due diligence into
management, strategy and
business model
•
GOV1
Responsibilities of management and supervisors •
GOV2 Oversight of key ESG risks and opportunities (IROs)•
SBM1 Description of the business model and strategic
determinants of sustainability
• SBM3 Dual Materiality Methodology
34
b) Involving affected
stakeholders in all key due
diligence steps
• GOV2 How management and supervisors are involved in
stakeholder communication (stakeholder review and
mapping)• SBM3 Double materiality results from a
stakeholder perspective
• IRO1 Overview of the Impact and Risk Assessment
Process
c) Identification and
assessment of negative
impacts
• SBM3 Methodology and Results of Double Materiality•
IRO1 Detailed Impact and Risk Assessment Process
d) Taking measures to address
these negative impacts
• E13 Action plans to mitigate climate impacts• E23 Water
resources management• E52 Resource management and
circular economy• S14Impact on employees and human
rights
• S44 Managing the impact on users and end consumers
e) Monitoring the effectiveness
of these activities and
communications to
stakeholders
• GOV2 Informing managing authorities and
communication plan with key stakeholders
Environmental aspects of the due diligence process
Climate and environmental risk assessment
Dalekovod Group conducts analyses of physical and transition risks related to climate
change. Scenario analysis applies the ESRS E1 methodology, including:
• Modeling of transition risks through RCP and SSP scenarios (Regulated
Concentration Pathways and Shared Socioeconomic Pathways).
• Managing emissions through cost estimates of the EU ETS Emissions Trading
System.
• Analysis of the resilience of the business model in relation to environmental
regulations.
Sustainable supply chain and environmental standards
Dalekovod Group actively adapts supply chains to ESG requirements through:
• Supplier ratings based on environmental standards,
• Green finance, including sustainability-related loans and bonds.
35
Social Aspects of the Due Diligence Process
Human rights risk assessment in supply chains
Dalekovod Group uses sectoral analysis and geopolitical factors to identify the risks of
forced labor, child labor and discrimination. The internal supplier assessment process
includes:
• Analysis of suppliers by high-risk regions,
• Supplier ESG rating system to assess compliance with human rights.
• In accordance with the requirements of the minimum social protection measures
of the EU Taxonomy (MSS), Dalekovod Group has prepared a business overview in
accordance with the requirements of the OECD and UNGP
Internal Due Diligence Processes
Each company within the Dalekovod Group is responsible for a regular audit of social risks,
including:
• Annual assessments of working conditions and employee rights,
• Monitoring and adaptation according to the standards of the ILO and the UN Global
Compact.
Managing due diligence processes
Internal Risk Management Processes
Dalekovod Group manages ESG risks through the inclusion of ESG risks in the annual
business risk review and through a dual materiality system, which includes:
• Internal mapping of ESG risks by business segments,
• Assessment of the financial impacts of ESG factors on business.
The Dalekovod Group also analyzes its operations according to the requirements of the
OECD and UNGP guidelines (MSS).
Code of Conduct and Third Party Due Diligence
According to the Code of Conduct of the Dalekovod Group, all companies within the Group
are obliged to conduct due diligence of third parties in the following cases:
• Doing business in high-risk regions,
• Cooperation with partners under international sanctions.
Risk Management and Internal Oversight of ESG Reporting
GOV-4GOV-5 Dalekovod d.d. has established, implements and maintains a process for hazard
identification that is permanent and proactive. The process is intended to take a broad
scope and to include various factors such as the social (for example workload,
36
exploitation, harassment and bullying) and cultural environment of the company. Risk
management is applied at different levels – strategic, operational, program and project, as
well as activities important for business and the achievement of set goals.
Risk Management Policy is based on the principles of the HRN ISO 31000 – Risk
Management standard. The policy was adopted by the Management Board and published
on our website. The Management Board of Dalekovod d.d. and the companies of the
Dalekovod Group identify and assess risks that may significantly affect the business and
the establishment of controls that mitigate risks. In this way, the achievement of the
strategic goals of the Dalekovod Group is supported, financial stability is ensured and the
reputation of the Dalekovod Group and the interests of all stakeholders involved in the
business are protected.
The procedure prescribes in more detail the process of identification, analysis and
assessment, i.e. prioritization of risk and methods for risk management, and all
organizational units participate in this process. This includes all employees of the
Company, workers of subcontractors, but also all those who have access to the workplace
and their activities such as workers (and other workers who are not under the direct
supervision of the company), suppliers, visitors and other persons. In accordance with the
defined risk management methodology, the Risk Catalogue for 2024 was created, in
which the main strategic, operational and financial risks, including sustainability risks,
were identified, analysed and assessed, and risk mitigation measures were determined,
as well as the persons responsible for risk management (risk owners). The risk catalogue
is updated annually when the effectiveness of the measures applied is also assessed. The
methodology and criteria of risk assessment are defined in relation to their scope, nature
and period of time to review due to changes in the external and internal context of the
company, in order to ensure that the preventive measures obtained are proactive instead
of reactive and that they are used in a systematic manner.
Documented information on the methodology and criteria is maintained and maintained.
The Management Board is responsible for designing, implementing, adapting, improving
and supervising the risk management system and annually reports to the Audit
Committee on its effectiveness.
On the basis of the identified risks and taking into account other relevant information, the
Internal Audit Department prepares annual and multiannual audit plans, which are
adopted by the Supervisory Board on the proposal of the Audit Committee. As part of the
37
multiannual plan for the period 2025 to 2028, an audit related to the processes in the
area of responsibility of the sustainable business department is envisaged, as well as
audits related to corporate governance and processes related to human resources.
The internal audit shall report on the results of the audits carried out and the fulfilment of
the recommendations issued on the basis of them to the Management Board, the Audit
Committee and the Supervisory Board.
The Audit Committee monitors the work of the internal risk control and management
system, with the aim of adequately identifying, publicly disclosing and managing the main
risks to which the Company is exposed. The Audit Committee regularly reports its findings
to the Supervisory Board.
The ISO 31000 approach to risk management includes:
• ESG risk assessment (transition risks, regulatory requirements, market
challenges).
• Sustainability management in the supply chain (ESG ratings of suppliers).
• Internal oversight of ESG reporting, with integration into audit processes
Dalekovod Group has introduced a data collection system in accordance with the
requirements of the ESRS standard and data points resulting from the dual materiality
process. In this way, timely and credible data related to sustainability reporting is ensured.
Certain departments are also in charge of collecting said data. The management of data
from the environmental part is planned on a monthly basis, while other data necessary for
the preparation of sustainability reports are available at the beginning of the year in which
the report is prepared.
During 2025, Dalekovod Group plans to integrate data collection processes in the field of
sustainability within the ISO 9001 standard and thus ensure the continuity and quality of
the collected data in accordance with the required procedures.
SBM-1 Disclosure Requirement – Strategy, Business Model and Value Chain
Key elements of the sustainability strategy and impact on business (ESRS 2.38–2.40)
Dalekovod Group integrates sustainability into its operations through three key strategic
elements, ensuring long-term resilience, innovation and compliance with regulatory
requirements.
Decarbonisation and energy efficiency
38
In order to reduce the carbon footprint and increase energy efficiency, Dalekovod Group is
implementing the following initiatives:
•
Development of low-carbon solutions – Optimization of production and
implementation of new technologies to reduce CO₂ emissions in energy
infrastructure.
•
Energy efficient products – Engineering and application of smart grids, digitized
energy transmission systems and electrification of transport.
•
Optimization of operational processes – Reduction of energy consumption in
production facilities through the application of efficient production methods and
the use of renewable energy sources.
Circular economy and sustainable supply chains
Dalekovod Group develops business models that encourage the circular economy and
reduce the ecological footprint of production:
•
Use of recycled and sustainable materials – Increased use of recycled steel and
other raw materials with a lower environmental impact.
•
Supply Chain Optimization – Digitalization of logistics and production processes
with the aim of reducing waste and transport-related emissions.
•
Eco-design and extended product life – Development of design solutions that
allow for easier maintenance and reuse of components.
ESG Compliance and Regulatory Adaptation
Dalekovod Group continuously strengthens its compliance with ESG regulations and
transparent reporting to ensure the long-term sustainability of its operations:
•
Application of the EU taxonomy and ESRS standards – Harmonization of business
with new regulations in order to increase transparency and attract sustainable
investments.
•
Sustainability in strategic decision-making – ESG criteria are becoming an integral
part of investment project assessments and risk management.
•
Strengthening reporting and stakeholder engagement – Improved methodology
for monitoring sustainability and involving key stakeholders in decision-making
processes.
•
In 2024 Dalekovod Group prepared a transition risk assessment, made a detailed
calculation of GHG emissions from scopes 1, 2 and 3 and, in addition to the existing
assessment of physical climate risks, created the foundations for the development
of a transition plan in 2025.
39
These Initiatives are included in the following strategic goals defined by the Sustainability
Strategy at the level of the Dalekovod Group, and the values and measures of the goals
will be defined in the action and transition plan that will be developed in 2025:
1. Reducing Scope 1 and Scope 2 emissions in support of the net-zero transition
2. Reduce waste and use packaging materials responsibly
3. Ensure a healthy and safe working environment for all employees
4. Promote Inclusion, Diversity and Equal Opportunities
6. Enable employees to develop and grow professionally
7. Attracting young people and encouraging cooperation with educational institutions
8. To encourage involvement in the development of local communities
9. Ensure responsible and ethical management and the integration of sustainability
into business
Description of significant product groups and markets (ESRS 2.40.a)
Product and service groups
Dalekovod Group operates in the electricity, infrastructure and construction sectors and
offers the following key products and services:
• Transmission lines and electric power infrastructure – Design, production and
installation of high-voltage transmission lines, transformer stations and power
equipment.
• Energy Poles and Structures – Production of steel lattice columns, girders and
structures for the energy sector, telecommunications and infrastructure.
• Maintenance and modernization of networks – Services of reconstruction and
upgrade of electric power facilities to increase energy efficiency and system safety.
• Renewable Energy – Engineering and construction of infrastructure for wind
farms, solar power plants and energy storage systems.
• Infrastructure projects – Construction works and design solutions for transport
infrastructure, including bridges, viaducts and rail systems.
Notable markets and customers
Dalekovod Group operates on the global market, with an emphasis on the European
Union and Scandinavia:
• Main customer groups: National power companies, transmission and distribution
network operators, investors in renewable energy sources, construction
companies and telecommunications operators.
40
A more detailed breakdown of the market by country of business is presented in note 6 of
the financial statement.
Employees by region
• Croatia: 1056 employees (largest production and R&D base).
• EU: 3 employees (sales, market development and support).
• Other regions: 9 employees (project engagements and sales).
Breakdown of revenues and ESRS sectors (ESRS 2.40b and 2.40c) in accordance with
the data from the financial statements
Sector (ESRS
classification)
Amount
(thousands of
EUR)
Percentage
of revenue
(%)
Product examples
BUILDING 173,706 89%
DV up to a voltage level of 750 kV
TS up to voltage level 750 kV,
Installation, testing, equipping and
commissioning
Equipping tunnels, roads and
motorways
Construction of power supply and
overhead contact line for railway
infrastructure
Construction of halls, halls and
industrial plants
PRODUCTION 20,783 11%
Suspension and coupling equipment up
to 750 kV, steel structures, lattice and
polygonal DV columns up to a voltage
level of 750 kV
Busbars, connecting equipment, steel
structures
Light poles and fences
Portals and road equipment
41
Overhead contact line portals and
equipment for railway infrastructure
Other 0 0% Other income
Business Model and Value Chain (ESRS 2.42)
Dalekovod Group operates through an integrated business model that combines
innovation, sustainability and operational excellence to ensure long-term stability and
competitive advantage in the global electricity infrastructure market.
Input factors
Dalekovod Group relies on key resources such as raw materials, energy, digital
technologies and a skilled workforce to optimize operations and increase efficiency:
•
Access to resources – Partnerships with certified suppliers that supply recycled
metals, sustainable building materials, and energy-efficient electronic
components.
•
Sustainable procurement – Focus on sourcing raw materials from responsible
sources in accordance with ESG standards and the EU taxonomy.
•
Digitalization of the supply chain – Implementation of advanced AI and IoT
systems to optimize inventory management, reduce waste, and increase
operational efficiency.
•
Green energy in production – A gradual transition to renewable energy sources in
production facilities to reduce overall CO₂ emissions.
Output factors and benefits
Through its operations, Dalekovod Group creates long-term economic, environmental and
social benefits for key stakeholders:
•
Customers – National Electric Power Companies, transmission and distribution
operators, transport companies, industrial complexes and investors in renewable
energy sources.
•
Investors – ESG-oriented banks, investment funds and institutions that support
green infrastructure and sustainable projects.
•
Society and the environment – Reduction of CO₂ emissions through smart grids,
energy-efficient transmission systems and the development of infrastructure for
renewable energy sources.
42
Value chain
Dalekovod Group operates a complex and interconnected value chain that includes the
following key stages:
•
Upstream Chain (Suppliers & Resources):
-
Sourcing raw materials such as steel, aluminum, and electronic components from
certified and ESG compliant suppliers.
-
Integration of recycled and sustainable materials to reduce the environmental
footprint of production.
•
Central Chain (Production and Implementation):
-
Research and development (R&D) of new technologies for smart grids, renewable
energy sources and digitized energy management systems.
-
Manufacture of power equipment, including power poles, power transformers and
structures for renewable energy sources.
-
Assembly and testing of products in accordance with international quality and
safety standards.
•
Downstream Chain (Distribution and Sustainability):
-
Logistics and distribution of products through optimized transport routes with the
aim of reducing emissions from delivery.
-
Installation and commissioning of energy systems using innovative digital
solutions.
-
Maintenance and modernization of electricity infrastructure to increase energy
efficiency and reliability of the system.
-
Implementation of recycling and reuse strategies for materials as part of the
circular economy model.
Key challenges and solutions in the sustainability strategy (ESRS 2.40.g)
Challenge Resolution strategy
Limited capacity for green
production
Investments in digitalisation and energy-efficient
production and construction facilities
Increased regulatory
requirements and ESG
customer requirements
Harmonization with reporting in accordance with ESRS
requirements through the preparation of the Sustainability
Report for 2024
43
Risk of commodity price
fluctuations
Development of long-term contracts with certified
suppliers and increasing the share of more recycled
materials
Demand for smart solutions
that enable energy savings
and workforce optimization Increasing investment in digital solutions
SBM-2 Disclosure Request – Stakeholder Interests and Views
Dalekovod Group actively works with key stakeholders to ensure that the strategy and
business model reflect their interests and expectations. The process includes regular
stakeholder involvement, assessment of material topics through double materiality, and
adjustment of the sustainability strategy based on the identified priorities
Stakeholder engagement (ESRS 2.45a)
Dalekovod Group continuously develops relationships with its stakeholders through
various mechanisms of interaction and consultation.
Key stakeholders and purpose of cooperation
Category of stakeholders How to turn on Purpose of cooperation
Customers & Clients
Technical forums, annual
professional congress, trade fairs
for the public, partnerships,
satisfaction surveys
Developing innovative and sustainable
solutions that meet customer needs
Investors and financial
institutions
ESG reporting, trade fairs for the
public and investors, sustainable
financial products
Ensuring transparency and access to green
finance
Suppliers
ESG assessment of suppliers,
trade fairs for the public, audits in
the field of quality and
sustainability
Ensuring a sustainable supply chain and
reducing the environmental footprint
Regulators and
governments
Reporting on compliance with the
EU Taxonomy, reporting in
accordance with the Accounting
Act
Regulatory Compliance and Transparent
Reporting
44
Employees
Education, health and safety
programs
Maintaining a high standard of working
conditions and professional development
Local communities
Through works projects and
installation of infrastructure
equipment that enables the
green transition and the
availability of electricity in
communities, educational
projects
Improving the quality of life and economic
opportunities for local communities and
contributing to community education
through cooperation with high schools and
faculties
Understanding the interests and views of stakeholders (ESRS 2.45b)
During the double materiality assessment conducted in 2024 Dalekovod Group identified
key ESG topics based on an assessment of stakeholder needs and on the basis of dialogue
with stakeholders.
Key findings of the stakeholder assessment
• Customers: Increased demand for energy efficiency and reduction of CO₂
emissions.
• Investors: Focus on technologies that meet the needs of the green transition,
decarbonization, and on ESG data transparency and regulatory compliance.
• Suppliers: Expecting stricter criteria for environmental sustainability in the supply
chain.
• Regulators: Increased requirements for CSRD reporting and the EU Taxonomy.
• Employees: Emphasis on occupational safety and professional development.
• Local communities: Expectations of social investment in infrastructure and
education.
Dalekovod Group has responded to these expectations by revising its sustainability
strategy, strengthening green technologies and increasing the transparency of ESG data.
Changes in strategy and business model based on stakeholder views (ESRS 2.45.c)
As part of the development of the Dalekovod Group strategy in 2023 based on the
materiality analysis in 2023 in which key stakeholders were also involved, Dalekovod
Group set the key topics of the sustainability strategy:
45
In 2024 through the implementation of the double materiality process:
• It is ensured that the interests and views of stakeholders are included in the
strategy and business model through a comprehensive stakeholder engagement
process.
• Key groups of affected stakeholders within the value chain have been identified,
including employees, customers, suppliers, investors and communities.
• Mechanisms for stakeholder involvement, such as regular communication and
separate communication such as the materiality assessment questionnaire, have
been put in place to gather feedback and ensure that their interests and views are
systematically addressed and their priorities for specific sustainability issues are
identified.
• Stakeholder feedback is integrated, through the foundations for updating the
sustainability strategy, into management processes to support sustainable
decision-making.
In 2025, Dalekovod Group will make changes to the strategy related to the dual
materiality process and the accompanying Implementation Action Plan.
Taking into account stakeholder views in management decisions (ESRS 2.45.d)
Theme Description
Implementation
Deadline
Accelerated
decarbonization
Increased investment in low-carbon
technologies used in the production and
construction of transmission lines and
reduction of own CO₂ emissions
2024.-2026.
ESG integration
into supply chains
Evaluating suppliers according to ESG
criteria and reducing the carbon footprint
2025
Increasing the
transparency of
ESG reporting
Adoption of the CSRD and EU Taxonomy in
ESG reporting
2024
Investments in
local communities
Financing of educational and infrastructure
projects in the communities where
Dalekovod Group operates
2024.-2026.
46
Within the framework of activities related to corporate social responsibility,
communication with numerous representatives of civil society and individuals is
established. In order to achieve the full implementation of activities related to corporate
social responsibility, communication with these stakeholders takes place in various ways:
through direct communication in business relations, regular meetings, special thematic
discussions, fairs and professional meetings. Communication with all of them takes place
depending on key issues and interests. In addition to the usual reporting system, for all
significant business activities (mail newsletters, website, stock market reports and media
reports), communication takes place in other ways depending on the need. The main
topics in the past period were related to the restructuring process of Dalekovod, the
impact of the COVID-19 pandemic on business, key investment projects and business
results with shareholders, as well as important contracts in Croatia and abroad.
Communication with employees takes place by e-mail and various notifications and
decisions of the company. Websites are an important means of communication with
partners in the country and abroad, but also with the public in general. We use the
following websites: www.dalekovod.com, www.dalekovod-proizvodnja.com and
www.dalekovod-projekt.com. In accordance with marketing requirements and needs, the
websites of Dalekovod d.d. and all the companies that make up the Dalekovod Group are
translated into English. The content of our main www.dalekovod.com page is partly
available in Norwegian and Swedish.
There is also a special internal page for workers through which internal information is
exchanged. Key topics arising from communication with stakeholders include the future
development of the company and job security, professional development of workers,
meeting the increasing number of requirements related to market, environmental and
regulatory standards that apply in the domestic and foreign markets in which we operate.
SBM-3 – Material impacts, risks and opportunities and their interaction
with strategy and business model
Dalekovod Group uses a dual-materiality methodology for strategic adjustment and
management of material impacts. By applying scenario analysis and continuous ESG
adjustments, it ensures business model resilience, regulatory compliance and long-term
competitive advantage.
A detailed process for the implementation of the dual materiality process and the output
material topics can be found in Chapter IRO-1 – Description of the Process for
47
Identifying and Assessing Material Impacts, Risks and Opportunities, and in detail in
each introduction to the E, S and G parts of the reporting.
Material impacts, risks and opportunities (ESRS 2.48.a)
Dalekovod Group has identified key impacts and risks that occur within the business
model, its own activities and the upstream and downstream value chain.
Category
Material
impact/risk/opportunity
The segment of the business where they
are most pronounced
Environmental
Risks of CO₂ emissions
and climate change
Production processes, transport, energy
efficiency
Environmental
Sustainable supply chains
and resource optimization
Procurement of raw materials, recycling,
waste management
Social
Employee safety and
ethical working conditions
Production facilities, field work
Social
ESG customer
requirements and market
competitiveness
Tenders, Electrification, Transport and
Energy Networks Market
Management
Regulatory requirements
(CSRD, EU Taxonomy)
ESG reporting, financial compliance
Technological
Digitalization and smart
grids
R&D and implementation of advanced
solutions of the Dalekovod Group
Current and expected effects of material impacts (ESRS 2.48b)
Current impacts on the business model
• The growing need for ESG certification and sustainable technologies is creating
competitive pressures.
• The increase in regulatory requirements leads to higher operating costs and the
need for ESG reporting.
• The volatility of raw material prices affects profitability and procurement strategy.
Impact of material factors on people and the environment (ESRS 2.48.c)
How impacts affect people and the environment
48
• Positive impacts: Improved energy efficiency reduces CO₂ emissions,
implementation of safety standards improves working conditions.
• Negative impacts: Risks associated with the transition to low-carbon technologies
and the rising costs of the green transition.
Time horizon of influence
• Short-term (2024-2026) – Strengthened ESG regulation and business model
adjustment.
• Medium term (2026-2030) – Implementation of low-carbon technologies and
optimization of energy processes.
• Long-term (2030-2050) – Achieving net-zero emissions through technological
transformation
Financial Effects of Material Risks and Opportunities (ESRS 2.48.d & e)
Immediate financial effects
Type of risk Financial impact
Regulatory requirements Increased operating costs of ESG compliance
Sustainable supply chains
Higher costs of sourcing sustainable raw materials
Green investments Cost reduction through incentives and financial incentives
Expected financial effects
Period
Effects
Short-term (2024-2026)
ESG investments increase CAPEX, but improve market
position
Medium term (2026-2030)
Revenue growth due to the electrification of
Scandinavian countries and EU solutions through an
increase in the need for electricity distribution from
source to point of consumption.
Long-term (2030-2050)
Full adaptation to sustainable models reduces operating
costs
49
Resilience of strategy and business model (ESRS 2.48.f)
Dalekovod Group uses scenario resilience analysis to ensure long-term adaptation:
• SSP1 scenario (ambitious decarbonisation): Increased investment in innovation
and regulatory adaptation.
• SSP2 scenario (gradual transition): Steady growth of ESG requirements and
investments in renewables.
The output data of these analyses are described in Chapter E1-IRO 1.
Changes in material factors (ESRS 2.48.g & h)
Category Changes compared to the previous reporting period
Regulatory risks CSRD and EU Taxonomy require greater business adjustments
Market risks
Growing customer demands for sustainable solutions, i.e.
compliance of business with ESG requirements. Dalekovod
Group participates in supervisory audits of investors who
require compliance with their own ESG requirements, and
compliance with such requirements has become a key part of
Dalekovod Group's business.
Managing impacts, risks and opportunities
IRO-1 – Description of the process for identifying and assessing material
impacts, risks and opportunities
In 2024 the materiality assessment of the Dalekovod Group, which was used in the
development of the Sustainability Strategy in 2022, was updated. The Double Materiality
Assessment (DMA) method at the corporate level was used to update the significant
topics.
The assessment of double materiality has been approved by the Management Board of
the Group. In the coming years, we will continue to work on further refining and adapting
the assessment in line with best practices and new guidelines within our ESG topics.
The impacts, risks and opportunities (IROs) identified as material to the operations and
value chain of the Dalekovod Group were mapped according to the disclosure
requirements set out in the thematic European Sustainability Reporting Standards (ESRS)
in order to identify material topics and information for the 2024 report
50
The assessment of the dual materiality of environmental, social and governance (ESG)
sustainability factors of the Group's transmission line in accordance with the ESRS is used
to determine the associated impacts, risks and opportunities (R&D) in the Group's value
chain and to assess their materiality in the short, medium and long term. Includes:
• Materiality of the Group's impacts – an assessment of the Group's and operating
companies' impacts on ESG factors, including human rights.
• Financial materiality for the Group – an assessment of the impacts, risks and
opportunities associated with these ESG factors, which may materially affect the
business results, financial value and success of the Group and its members in
meeting their obligations (financial materiality).
Based on the analysis of the Group's already defined topics from 2023 the Group's
Sustainability Strategy, the analysis of competition topics (benchmark), indicative topics
according to sectoral SASB standards, the results of the workshop and additional
refinement of the Group's experts in specific areas, a list of potentially significant topics
for the Group was compiled according to the list of sustainability factors defined in point
AR 16 of the ESRS. The topic of project management has been added to the list of topics
as a topic of special importance for the Dalekovod Group.
Methodology for estimating the double materiality of Dalekovod Group
Value chain mapping
As part of the Double Materiality Assessment (DMA), material impacts across all
operations and the value chain of the Dalekovod Group were assessed. The business
model encompasses activities in the production of power equipment, transmission and
distribution of electricity, digital solutions and platforms, and renewable energy sources.
The upstream value chain includes key suppliers of materials and energy resources,
manufacturers of specialized equipment, as well as strategic partners within the industry.
In addition, investors and R&D partners play an important role in optimizing innovation
and reducing environmental impacts.
The downstream value chain includes users of Dalekovod Group's products and services,
including electricity companies, carriers and industrial entities, as well as end users who
rely on Dalekovod Group's technological solutions. It also includes stakeholders such as
regulatory authorities, transmission and distribution system operators, and end
customers of digital solutions and infrastructure.
51
The assessment of double materiality also includes an assessment of the impact on
communities, workers within the value chain and employees of our suppliers who are not
directly employed by Dalekovod Group.
To assess the impact in segments with limited data availability, industry analyses,
regulatory reports and surveys were used to identify high-risk areas and vulnerable
groups.
Key ESG topics assessed as material
• Based on the assessment of double materiality, key ESG topics were identified that
were assessed as significant for the operations of Dalekovod Group. These topics
are aligned with the European Sustainability Reporting Standards (ESRS) and
include:
• Environmental topics:
- Climate change and energy consumption – adaptation and mitigation of climate
change through the implementation of low-carbon technologies and energy
efficiency (assessed as a key topic).
- Resource use and circular economy – increasing the share of recycled materials
and optimising processes to reduce waste, with the theme of Inflows of funds,
including resource use assessed as crucial.
• Social topics:
- Working conditions and safety of employees – ensuring high standards of
occupational safety and continuous investment in the health and safety of
employees and suppliers.
- Diversity, equality and inclusion – promoting gender balance, employee rights
and ethical business practices throughout the value chain.
- Impact on local communities – encouraging socially responsible practices and
contributing to the development of infrastructure through sustainable projects.
• Management and Business Ethics:
- Sustainable procurement and responsible business – integration of ESG criteria
into the procurement process and supplier relations, including payment
practices
- Compliance with regulatory requirements – proactive monitoring and
implementation of new regulations and sustainability standards, with an
52
emphasis on promoting corporate culture and preventing and detecting
corruption and bribery.
- Project management – as a key topic in the field of management, project
management was highlighted as a key aspect of Dalekovod Group's business
success.
Timeframes
When assessing IRO (impact, risks, opportunities), we apply time frames defined
according to ESRS 1 standards:
• Short-term: current reporting year (2024);
• Medium-term: 1-5 years (2025-2029);
• Long-term: impacts and risks beyond 5 years (2030+).
Identification and assessment of material risks and opportunities
Dalekovod Group continuously assesses potential ESG risks that may cause financial or
reputational consequences. The analysis includes:
• Regulatory and market risks – compliance with new regulations and sustainability-
related market pressures.
• Climate risks – physical risks related to extreme weather events and transition risks
of adaptation to low-carbon operations.
• Resource dependency – availability and price of key materials and energy sources.
In order to quantify ESG risks, we use scenario modeling that allows the assessment of
the financial risk profile in different conditions and time frames.
Involving key internal and external stakeholders
Key internal and external stakeholders are involved in the assessment of double
materiality.
• External stakeholders:
- Regulatory bodies – compliance with EU directives and ESG standards.
- Investors and financial institutions – requirements for transparency in ESG
reporting and investments in sustainable projects.
- Customers and partners – expectations in terms of reducing the carbon footprint
and responsible procurement, direct users of Dalekovod Group's products and
services who shape development strategies with their feedback.
53
- Local communities – contribution to the development of infrastructure and
sustainable energy solutions.
• Internal stakeholders:
• Employees – a key resource of the Dalekovod Group, including all levels of
employees, which includes the Supervisory Board, the Management Board, all
employees from operational workers to management, shareholders, owners, and
the works council and trade unions with a focus on working conditions, safety,
development and promotion.
• Experts and members of the sustainability working group – key employees
responsible for the development and implementation of ESG strategies within the
Dalekovod Group.
Results of the Assessment of Dual Materiality of Dalekovod Group
Below is the result of the assessment of the double significance of topics according to
their importance for the Dalekovod Group:
Overview of important topics of the Dalekovod Group
ENVIRONMENT
SOCIETY
MANAGEMENT
Climate change
Own workforce
Business conduct
Adaptation to
climate change
⚠
Working conditions
⚠
Corporate Culture
⚠
Climate change
mitigation
⚠
Equal treatment and
opportunities for all
⚠
Protection of
whistleblowers
Energy
⚠
Other rights arising
from the
employment
relationship
⚠
Supplier relationship
management
⚠
Resources and the circular
economy
Affected
communities
Corruption and
bribery
⚠
Resource inflows
⚠
Economic, social and
cultural rights of
communities
Topics of particular importance
that are not covered by the ESRS
core set
Resource
outflows
⚠
Consumers and
end-users
Project
management
⚠
Waste
Personal safety
Legend: -positive effects, -negative effects, ⚠ -risks, -opportunities
54
Disclosure Request IRO-2 – ESRS Disclosure Requirements Covered by the
Corporate Sustainability Report
Through the process of dual significance analysis, key topics, sub-topics, and sub-
themes were identified. Based on them, the material aspects for each IRI (impact,
risk, opportunity) were determined. Then, specific information and detailed data
points ("DP Data Points") were selected and published for reporting. Only data
points related to material policies, actions and goals, and metrics related to the
identified sub-topics are reported.
The table below presents data resulting from other EU legislation listed in Appendix B of
ESRS 2. The table indicates where these data are located in our report and which of the
data are not rated as significant.
Request for
publication
Data point
SFDR (1)
Third Pillar (2)
Reference values (3)
European Climate Law (4)
General information
GOV-1
21(d)
Gender diversity in the administration
○
○
GOV-1
21(e)
Percentage of independent board members
○
GOV-4
30
Due Diligence Statement
○
SBM-1
40(d)(i)
Participation in fossil fuel activities
○
○
○
SBM-1
40(d)(ii)-
(iv)
Activities in the chemical, controversial weapons or
tobacco industry
○ ○ ○
Environment
E1-1 14 Transition plan to achieve climate neutrality ○
E1-1 16(g) Exclusion from Paris Agreement benchmarks ○ ○
E1-4
34
Greenhouse gas emission reduction targets
○
○
○
E1-5 38
Fossil energy consumption broken down by source
(only sectors with a significant impact on the climate)
○
E1-5 37
Energy consumption and combination of energy
sources
○
E1-5 40-43
Energy intensity associated with activities in sectors
with a significant impact on the climate
○
E1-6 44
Gross Scope 1, 2, 3 GHG Emissions and Total GHG
Emissions
○ ○ ○
E1-6
53-55
Gross greenhouse gas intensity
○
○
○
E1-7
56
Greenhouse gas removals and carbon credits
○
55
E1-9 66
Exposure of the reference portfolio to physical risks
related to climate change
○
E1-9 66(a)
Breakdown of monetary amounts according to acute
and chronic physical risk
○
E1-9 66(c)
Location of significant assets exposed to significant
physical risk
○
E1-9 67(c)
Breakdown of the book value of a company's real
estate by energy efficiency classes
○
E1-9 69
Degree of exposure of the portfolio to climate-related
opportunities
○
E5-5
37(d)
Non-recycled waste
○
E5-5
39
Hazardous waste and radioactive waste
○
Society
SBM-3-S1
14(f)
Risk of forced labor
○
SBM-3-S1
14(g)
Risk of child labor
○
S1-1
20(a)
Human rights policy commitments
○
S1-1 21
Due diligence policies on matters covered by core ILO
Conventions 1 to 8
○
S1-1 22
Procedures and measures to prevent trafficking in
human beings
○
S1-1 23
Occupational accident prevention policy or
management system
○
S1-3
32(c)
Complaints Handling Mechanism
○
S1-14 88(b)(c)
Number of deaths and number and rate of accidents
at work
○
S1-14 88(e)
Number of days lost due to injuries, accidents, deaths
or illnesses
○ ○
S1-16
97(a)
Mismatched gender pay gap
○
S1-16 97(b)
Excessive difference in the salary of directors and
employees
○ ○
S1-17
103(a)
Incidents of discrimination
○
S1-17 104(a)
Failure to comply with the UN Guiding Principles on
Business and Human Rights and OECD Guidelines
○ ○
Affected communities
S3-1
16
Human rights policy commitments
○
S3-1 17
Failure to comply with the UN Guiding Principles on
Business and Human Rights, the ILO Principles or the
OECD Guidelines
○ ○
S3-4
36
Human rights issues and incidents
○
Consumers and end-users
S4-1 16 Policies relating to consumers and end-users ○
S4-1 17
Failure to comply with the UN Guiding Principles on
Business and Human Rights and OECD Guidelines
○ ○
56
S4-4
35
Human rights issues and incidents
○
Management
G1-1
10(b)
United Nations Convention against Corruption
○
G1-1
10(d)
Protection of whistleblowers
○
G1-4 24(a)
Fines for violating anti-corruption and anti-bribery
regulations
○ ○
G1-4
24(b)
Anti-corruption and anti-bribery standards
○
The following table shows all sections of the material topic and disclosure requirements
and their positions throughout the report.
Section Theme Request for publication Page
General announcement
BP-1 General basis for the preparation of the
Sustainability Report
2
BP-2 Special Circumstances Disclosures 2
GOV-1 The Role of Administrative, Management and
Supervisory Bodies
4
GOV-2 Submitted information and sustainability issues
dealt with by the administrative, management and
supervisory bodies of the company
5, 8
GOV-3 Integrating sustainability results into incentive
programs
9
GOV-4 Statement of Due Diligence and ESG Risk
Management
9
GOV-5 Risk Management and Internal Controls on
Sustainability Reporting
11
SBM-1 Strategy, Business Model and Value Chain 11
SBM-2 Interests and Views of Stakeholders 16
SBM-3 Significant impacts, risks and opportunities and
their
26
IRO-1 Description of the process for identifying and
assessing material impacts, risks and opportunities
21
IRO-2 ESRS disclosure requirements covered by the
corporate sustainability report
25
MDR-P Policies adopted to manage significant
sustainability factors
37
MDR-T Monitoring the effectiveness of policies and
measures based on target values
37
Environment
ESRS E1
Climate Change
E1-1 Transition Plan for Climate Change Mitigation
32
E1. SBM-3 Significant Impacts, Risks and Opportunities
and Their Interaction with Strategy and Business Model
32
E1. IRO-1 Description of the procedures for identifying
and assessing significant impacts, risks and
opportunities related to climate change
36
57
E1-2 Policies related to climate change mitigation and
adaptation
44
E1-3 Measures and resources related to climate policies
44
E1-4 Targets related to climate change mitigation and
adaptation
45
E1-5 Energy consumption and combination of energy
sources
45
E1-6 Gross Scope 1, 2, 3 Gross Greenhouse Gas
Emissions and Total Greenhouse Gas Emissions
47
ESRS E5 Resource Use and Circular
Economy
E5. IRO-1 Description of the procedures for identifying
and assessing significant impacts, risks and
opportunities related to resource use and the
circular economy
57
E5-1 Policies related to resource use and the circular
economy
E5-2 Measures and resources related to resource use
and the circular economy
58
E5-3 Targets related to resource use and the circular
economy
58
E5-4 Resource Inflow
58
E5-5 Resource Outflow
59
Social
ESRS S1 Own workforce
S1. SBM-2 – Interests and views of stakeholders 16
S1. SMB-3 Significant Impacts, Risks and Opportunities
and Their Interaction with Strategy and Business Model
54
S1-1 – Policies related to their own workforce
65
S1-2 Procedures for cooperating with own workers
and workers' representatives on impacts
67
S1-3 Procedures for remedying adverse impacts and
channels through which own workers can raise concerns
69
S1-4 Taking measures for significant impacts on own
workforce, approaches to mitigating significant risks and
realizing significant opportunities related to one's own
workforce, and the effectiveness of these measures
70
S1-5 Targets related to the management of
significant adverse impacts, the incentivising of positive
impacts and the management of significant risks and
opportunities
72
S1-6 Characteristics of the company's employees 72
S1-8 Coverage of collective bargaining and social
dialogue
74
S1-9 Diversity indicators
75
S1-10 Adequate salaries 76
S1-14 Health and safety indicators 76
58
S1-16 Compensation indicators (pay gap and total
compensation)
76
S1-17 Cases, complaints and serious human rights
impacts
77
ESRS S3 Affected Communities
S3. SBM-2 – Interests and views of stakeholders
16
S3. SMB-3 Significant Impacts, Risks and Opportunities
and Their Interaction with Strategy and Business Model
78
S3-1 – Policies related to own workforce 79
S3-2 Procedures for cooperating with own workers
and workers' representatives on impacts
79
S3-3 Procedures for remedying adverse impacts and
channels through which own workers can raise concerns
80
S3-4 Taking measures for significant impacts on one's
own workforce, approaches to mitigating significant
risks and realizing significant opportunities related to
one's own workforce, and the effectiveness of these
measures
80
S3-5 Targets related to the management of
significant adverse impacts, the incentivising of positive
impacts and the management of significant risks and
opportunities
80
ESRsS S4 Consumers and End Users
S4. SBM-2 – Interests and views of stakeholders 16
S4. SMB-3 Significant Impacts, Risks and Opportunities
and Their Interaction with Strategy and Business Model
81
S4-1 Policies for consumers and end users 82
S4-2 Procedures for cooperating with own workers
and workers' representatives on impacts
82
S4-3 Procedures for remedying adverse impacts and
channels through which own workers can raise concerns
82
S4-4 Taking measures for significant impacts on own
workforce, approaches to mitigating significant risks and
realizing significant opportunities related to their own
workforce, and the effectiveness of these measures
83
S4-5 Targets related to the management of
significant adverse impacts, the incentivising of positive
impacts and the management of significant risks and
opportunities
83
Governance
ESRS G1
Business Conduct
G1. GOV-1 The role of administrative, supervisory and
management bodies
4
G1-1 Business Conduct Policies and Corporate Culture
85
G1-2 Supplier Relationship Management
86
G1-3 Prevention and detection of corruption and bribery
88
59
G1-4 Confirmed cases of corruption or bribery
88
G1-6 Payment Practices
89
G1-1 Business Conduct Policies and Corporate Culture
Dalekovod Group Sustainability Policy (MDR-P, MDR-T)
Description of the main content of the policy
Dalekovod Group recognizes the key role of sustainable business in creating long-term
value for stakeholders, including employees, clients, investors, suppliers and the
communities in which it operates. This policy is aligned with the ESRS and is based on the
principles of double materiality, integrating economic, environmental and social aspects of
business.
Principles of sustainable business
Our actions are based on the following principles:
•
Social responsibility – We respect human rights, labour rights and encourage
inclusion.
•
Environmental protection – We apply ISO 14001 and ISO 50001 standards and
strive to reduce emissions and use resources sustainably.
•
Transparent and Accountable Management – We adhere to ethical business
practices and comply with the Code of Corporate Governance.
•
Innovation and digitalization – We develop new technologies to increase energy
efficiency and reduce the environmental footprint.
ESG Strategic Goals and Commitments
Environmental sustainability
Dalekovod Group is committed to reducing negative environmental impacts through:
•
Energy management – Increasing energy efficiency, optimizing resource
consumption and using renewable energy sources.
•
Climate change and decarbonisation – Reducing greenhouse gas emissions in
line with the objectives of the European Green Deal.
•
Circular economy – Efficient use of materials, recycling and reuse of waste in
production processes.
Social responsibility
We commit to:
60
•
Fair and safe working conditions – Ensuring the health and safety of employees
(ISO 45001), encouraging equal opportunities and career development.
•
Supplier relationship and human rights – Working with suppliers who apply
ethical standards and sustainable practices.
•
Investing in the community – Supporting education, local initiatives and
employing local workers.
Management standards
Dalekovod Group is committed to the implementation of:
•
Code of Ethics – Zero tolerance for corruption and bribery.
•
Whistleblower protection – Safe channels for reporting irregularities.
•
Regulatory Compliance – Compliance with national and international regulatory
frameworks.
•
Integration into business strategy and performance monitoring
•
Dalekovod Group continuously monitors and reports on sustainability through:
- ESG indicators and targets – Aligned with ESRS and stakeholder requirements.
- Internal and external audit – Ensuring the accuracy and transparency of data.
- Regular policy update – Adaptation in line with changes in legislation and best
practices.
Policy scope
The policy applies to all companies within the Dalekovod Group and includes:
• Activities: production, research and development of innovative technological
solutions for energy transition and digitalization.
• Value chain: applies to suppliers, customers and partners through
requirements for sustainable practices.
Geographical areas: globally, in all regions in which the Dalekovod Group operates.
Stakeholders: employees, customers, investors, local communities, regulators and
partners.
Highest level of responsibility
The Management Board of Dalekovod Group is responsible for the implementation of the
sustainability policy, which provides resources, strategic guidance and supervision over
the implementation of the policy.
Third-party standards and initiatives
61
Dalekovod Group has been a member of the UN Global Compact since 2007 and adheres
to its principles on human rights, labor rights, environmental protection and anti-
corruption. It also applies international standards and norms, including ISO 14001
(environmental management), ISO 45001 (occupational health and safety), and ISO 50001
(energy management).
Taking into account the interests of key stakeholders
When defining the policy, the interests of key stakeholders were taken into account
through:
• Partnerships and dialogue with regulators, local communities and industry.
• Employee development through investments in education and professional
growth.
• Support local communities through sponsorships, educational initiatives and
volunteering.
• Working with suppliers to promote sustainable practices.
Accessibility of the policy to stakeholders
The sustainability policy is available through the official website of the Dalekovod Group of
internal communication channels for employees and business partners. Transparency is
ensured through regular reports and audits.
Specific sustainability goals of the Dalekovod Group related to the policy and strategy
of the sustainable business of the Dalekovod Group
Climate & Resources
Goal 1: A zero-emission future
Reducing greenhouse gas emissions in scope 1 and 2, with the start of the net-zero
transition.
Goal 2: Circular economy
Reducing waste generation and responsible use of packaging materials.
Employees and communities
Goal 3: Health and safety
Ensure a healthy and safe working environment for all employees.
Goal 4: Inclusion, diversity and equality
62
Promoting inclusion, diversity and equal opportunities for all persons.
Goal 5: Professional development of employees
To enable employees to develop professionally and grow within the Dalekovod Group to
continuously invest in education and leadership development.
Goal 6: Youth in focus
Attracting young people and encouraging cooperation with educational institutions
through scholarships and internships.
Goal 7: Community involvement
Encouraging involvement in the development of local communities through investments
in educational, cultural and sports initiatives.
Responsible management
Goal 8: Transparency and accountability
Implementing robust ESG governance and risk.
Goal 9: Accountability in the value chain
Raising sustainability standards among suppliers and partners.
Sub-goals for the implementation of these goals defined by the strategy and policies will
be elaborated in detail in each segment of the report (MDR-A) with the corresponding
metrics and statuses (MDR-M).
During 2025. Dalekovod Group will also develop a transition plan based on the collected
data in 2024. The transition plan will include plans and actions in response to:
- Decarbonization and the goal of reducing CO2 emissions
- Physical risks related to climate change
- Transition risks related to climate change
Policies at the level of Dalekovod Group:
Management system policies are available on the website of Dalekovod d.d., on the
intranet of Dalekovod d.d., and on notice boards within the company and on construction
sites. Management system policies are transferred to all employees as the basic tool of
the Management Board in securing and managing systems. Management system policies
are available and communicated to subcontractors and all other interested parties.
63
All employees are familiar with the policy and goals. Motivation and a positive attitude
towards environmental protection enables the achievement of the set goals. The
education system for all employees ensures their awareness of the established
environmental management system, environmental policy, goals, their environmental
impacts and benefits derived from the improved performance of their work, and the
possible consequences of non-compliance with the requirements.
Table 6.1 List of adopted policies and their content
Politics Content Coverage
Responsibl
e for
application
External
standards
Availability
The Dalekovod Group's sustainability policy includes the policies listed below
Energy use
and
consumption
and energy
efficiency
policy
- Encourages
the use of
energy-
efficient
technology and
practices.
-
Harmonization
of work with
international
standards.
- Defines
regular
monitoring and
reporting, and
goal setting
Dalekovo
d Group
Everyone
ISO
50001:201
8
It will be available at:
https://www.dalekovod.hr
/
Safe
Workplaces
and
Employees
Policy
- Ensuring
fair and
competitive
wages
- Respect for
employees'
working hours
- Encouragin
g freedom of
association
- Prevention
of violence,
discrimination,
Dalekovo
d Group
Everyone
It will be available at:
https://www.dalekovod.hr
/
64
harassment
and retaliation
Health and
safety policy
- Application of
high standards
and
compliance
with laws
- Continuous
bend
- Regular
monitoring and
reporting, as
well as process
evaluation and
elimination of
potential risks
Dalekovo
d Group
Everyone
ISO
45001:201
8
It will be available at:
https://www.dalekovod.hr
/
Environmental
policy
- Development
and
development
of the project
in accordance
with standards
- Continuous
bend
- Management
of impacts on
lands and
areas of
affected
communities,
and monitoring
of community
interests
Dalekovo
d Group
Everyone
ISO
14001:201
5
It will be available at:
https://www.dalekovod.hr
/
Circular
economy
policy
- Encourages
optimization of
material use,
recycling,
innovation in
materials,
responsible
waste
management
and education
about the
importance of
Dalekovo
d Group
Everyone
It will be available at:
https://www.dalekovod.hr
/
65
the circular
economy
- Regular
monitoring and
reporting of
results
Supplier
Relationship
Management
Policy
- Defines
cooperation
based on
principles,
Group policies
and
international
standards and
rights.
- Defines
expectations
regarding
ethical
behavior and
practices and
practices for
combating
bribery and
corruption.
- Encourages
transparency
and
cooperation
towards
sustainability
in the supply
chain.
Dalekovo
d Group
Everyone
ISO 9001
ISO 14001
ISO 50001
ISO 45001
It will be available at:
https://www.dalekovod.hr
/
Corporate
Social
Responsibility
and
Community
Involvement
Policy
- Defines
contribution to
the community
through job
creation,
involvement of
local suppliers
and partners,
and
participation in
infrastructure
Dalekovo
d Group
Everyone
It will be available at:
https://www.dalekovod.hr
/
66
and social
projects
- Promotion
and respect for
human rights
- Defines
support for
educational,
cultural and
sports
initiatives
Corporate
Governance
Policy
- Committed to
principles in
the field of
human rights,
labor law,
environmental
protection and
anti-corruption
(as a member
of the UN
Global
Compact)
- Defines the
principles of
management:
- ethical,
transparent
and
responsible
business,
- Stakeholder
engagement
- Regulatory
compliance
- quality
management,
and
- Application
of the Code of
Corporate
Governance of
the Zagreb
Stock
Exchange and
Dalekovo
d Group
Everyone
ISO
9001:2015
It will be available at:
https://www.dalekovod.hr
/
67
the Code of
Conduct of
the Dalekovod
Group
Internal
Whistleblowin
g Ordinance –
Protection of
Whistleblower
s
- Reporting
procedures and
process
- Anonymous
reporting
- Resolution
procedures
Dalekovo
d Group
Everyone Sharepoint
Environmental information
Dalekovod Group specializes in the sale, construction, supervision and design of power
lines and plants up to 750 kV, suspension and connecting equipment, railway
infrastructure facilities, roads, buildings, sports facilities and telecommunication lines and
poles, lighting poles and halls, steel and other load-bearing structures, equipment of civil
engineering facilities and electrical installations, with the provision of anti-corrosion metal
protection services.
OUR MISSION is to develop and maintain business relationships with domestic and
foreign partners by ensuring high quality standards in the field of engineering, production
and construction of electricity, road, railway and telecommunications infrastructure, which
are based on many years of knowledge and tradition, innovation and strong social
responsibility and trust in the successful implementation of all jobs.
OUR VISION is to become a leading international company in providing complete and
quality services of engineering, production and construction of electricity, road, railway
and telecommunications infrastructure, primarily by strengthening our positions in foreign
markets, contracting new business and penetrating new markets, all on the basis of a long
tradition, knowledge, competitiveness, innovation and reliability.
Dalekovod Group is committed to sustainable development, achieving a balance between
the environment, the Society and our activities in order to meet the needs of today
without jeopardizing the prospects of future generations to meet their needs. Sustainable
development, transparency and compliance with the requirements (of interested parties,
standards, laws) are components of the economic growth of the Societies.
Dalekovod Group recognizes that environmental, social and governance (ESG) issues are
of increasing importance, resulting in significant impacts on all aspects of our business
68
activities. Climate change is also affecting our industry, and climate risks and
opportunities are an inevitable part of the business. In order to mitigate climate change,
we are developing a transition plan as part of our Sustainability Strategy.
During 2024 not a single event with a negative impact on the environment was recorded.
ESRS E1 Climate Change
Transition plan for climate change mitigation
E1-1 Dalekovod Group recognizes the importance of an active approach to the climate
transition and commitment to reducing the negative impact on the environment in
accordance with the European Sustainability Reporting Standards (ESRS E1). Currently,
Dalekovod Group does not have an elaborate climate transition plan that would address in
detail environmental transition risks, physical climate risks and specific measures to
reduce CO₂ emissions. Nevertheless, aware of its responsibility and the strategic
importance of the transition to a low-carbon economy, the Group has defined clear goals
within its sustainability strategy.
Dalekovod Group has committed to developing a comprehensive climate transition plan
by 2026 that will include projections of measures and targets for 2030 and 2050, which is
a key step towards aligning with the European Union's ambitions in reducing climate risks.
In addition, by 2026, the Group plans to increase energy efficiency by 35% compared to
the base year 2019, which will directly affect the reduction of energy intensity of
operations, expressed through the indicator of energy consumption in relation to
revenues (MWh/million EUR).
In 2024 Dalekovod Group prepared a detailed analysis of CO2 emissions from Scopes 1, 2
and 3, assessed transition risks and prepared an assessment of climate risks to the
Group's activities and assets. Based on the above input data, the Transmission Line Group
will develop a Transition Plan during 2025.
E1. SBM-3 Significant Impacts, Risks and Opportunities and Their Interaction with Strategy and
Business Model
E1. SBM-3_01, E1. SBM-3_02, E1. SBM-3_03 // E1. SBM-3_04, E1. SBM-3_05, E1. SBM-
3_06, E1. SBM-3_07
69
Significant impacts, risks,
opportunities
Description of significant impacts,
risks, opportunities
Stage in
the value
chain
Time
horizon
ADAPTATION TO CLIMATE CHANGE
POSITIVE
EFFECT -
REAL
Climate
resilience
The Dalekovod Group's production
program develops equipment that
can withstand extreme conditions
and can design a high level of
resistance according to the
customer's specifications.
Transmission line poles are
manufactured taking into account
the climatic and weather conditions
of the area where they are installed,
thus contributing to the resilience
and adaptation of transmission and
distribution networks to climate
change.
Own
businessDownstream
Short-
term to
long-
term
CLIMATE CHANGE MITIGATION
NEGATIVE
EFFECT -
REAL
GHG emissions
GHG emissions at all stages of the
value chain include emissions from
the production of semi-finished
products and components, inbound
and outbound transport, emissions
from production, and emissions
related to the use of products.
UpstreamOwn
businessDownstream
Short-
term to
long-
term
POSITIVE
EFFECT -
REAL
Reducing GHG
emissions -
own business
By reducing GHG emissions in
production, increasing energy
efficiency and purchasing electricity
from renewable sources, the
Dalekovod Group contributes to
climate change mitigation.
Own business
Short-
term to
long-
term
POSITIVE
EFFECT -
REAL
Reducing GHG
emissions -
supporting the
integration of
renewable
energy sources
into the grid
and the
By performing its activities, the
Dalekovod Group enables their
modernization and increase in
capacity to receive an increasing
number of renewable energy
sources by designing, manufacturing
and building transmission lines and
substations for transmission and
Downstream
Short-
term to
long-
term
70
decarbonisation
of transport
distribution networks in Croatia, EU
Member States and the world.
Dalekovod Projekt develops
renewable energy projects (wind
farms, solar power plants, biomass,
small hydropower plants) and
modernizes energy systems for
greater efficiency, contributing to
national energy and climate goals.
At the same time, it designs and
builds road and rail infrastructure,
thus increasing the safety and flow
of traffic, reducing pollutant
emissions and encouraging
decarbonization. By doing so, it
supports the goals of the Energy
Development Strategy of the
Republic of Croatia, the Integrated
National Energy and Climate Plan
and the Transport Development
Strategy of the Republic of Croatia.
Furthermore, the company Dalekovod
Projekt deals with development
projects focused on renewable energy
sources and in cooperation with a
network of consultants, experts,
companies, faculties, institutes and
subcontractors in construction and
installation, offers certain specific
services in the projects of wind farms,
solar power plants, biomass
exploitation projects and small
hydropower plants. Dalekovod Projekt
also provides a comprehensive service
of modernization of energy systems in
order to increase energy efficiency. In
this way, the Dalekovod Group
contributes to the goals of the Energy
Development Strategy of the Republic
of Croatia until 2030, with a view to
2050, the goals of the Integrated
71
National Energy and Climate Plan of
the Republic of Croatia and the goals
of the Climate Change Adaptation
Strategy of the Republic of Croatia
until 2040 with a view to 2070. By
designing, manufacturing and building
infrastructure for roads, motorways
and railways, Dalekovod Group
contributes to road traffic safety,
connecting the road and rail network
with European traffic flows and the
existing network of the Republic of
Croatia, and traffic flow, which reduces
traffic congestion and contributes to
the reduction of environmental impact,
especially the reduction of pollutant
emissions into the air. The
modernization of rail transport also
contributes to the decarbonization of
transport in Croatia. By implementing
projects in the transport sector, the
Dalekovod Group contributes to the
achievement of the goals of the
Transport Development Strategy of the
Republic of Croatia until 2030.
ENERGY
POSITIVE
EFFECT -
REAL
Energy
efficiency and
renewable
energy
Systematic management of energy
aspects through ISO 50001 in
individual companies. Investing in
energy-efficient technologies and
optimising the energy consumption
of buildings and plants to reduce
overall energy consumption. For the
needs of its production processes,
the Dalekovod Group procures
electricity from renewable sources.
There is a decrease in energy
consumption per unit of income
through energy efficiency measures.
UpstreamOwn
business
Short-
term to
long-
term
PHYSICAL AND TRANSITION RISKS RELATED TO CLIMATE CHANGE
72
PHYSICAL
RISK
Difficult work
due to weather
extremes
Risk of loss of assets and
interruption of key business
processes due to natural or other
disasters. Risk of physical damage
to property and infrastructure due
to extreme weather
conditions.>CONSOLIDATED
KATALOG_10022025【DLKV】>
REPORT ON RISK MANAGEMENT
DALEKOVOD D.D. FOR 2024【Risk
Rating - 8】
Own business
Short-
term to
long-
term
PHYSICAL
RISK
Delays in the
delivery of raw
materials
Difficult transport of raw materials
to the company due to the impact of
climate change on transport routes.
Climate change is further affecting
the complexity of European supply
chains. (related to E5 - Resource
Use and Circular Economy)
>INTEGRATED
KATALOG_PONDERIRANI_10022025
【
Risk Label - 8
】
Upstream
Short-
term to
long-
term
TRANSITION
RISK
Rise in
commodity
prices
Rising prices of critical materials due
to regulatory changes related to
climate change, which increases
operating costs. (related to E5 -
Resource Use and Circular
Economy)
>Overview of Transition Risks of the
DALEKOVOD GROUP
Upstream
Medium
to long
term
TRANSITION
RISK
Business
Adjustment
Costs
Costs of adapting operations to new
standards due to customer
demands for sustainable supply
chains and products with minimal
environmental impact. (related to
E5 - Resource Use and Circular
Economy)
>Overview of Transition Risks of the
DALEKOVOD GROUP
Own
businessDownstream
Medium
to long
term
TRANSITION
RISK
Decarbonization
of production
processes
Investments in new technologies to
increase energy efficiency and
reduce emissions can significantly
increase capital costs (pressures
Own business
Medium
to long
term
73
due to the need to decarbonise
production processes).
>Overview of transition risks of the
DALEKOVOD GROUP
TRANSITION
RISK
Increase in the
price of energy
products
The increase in the price of energy
products due to the physical and
transition risks of the electricity
sector further increases energy
costs for industry and consumers.
>Overview of transition risks of the
DALEKOVOD GROUP
Own business
Medium
to long
term
OPPORTUNITIES RELATED TO CLIMATE CHANGE
PRODUCTS
AND
SERVICES
Increased
demand for key
products
Increased demand for key products
of the Dalekovod Group due to the
acceleration of the green transition.
>Overview of transition risks of the
DALEKOVOD GROUP
Own
businessDownstream
Medium
to long
term
PRODUCTS
AND
SERVICES
Regulatory
incentives and
subsidies
The EU and national governments
finance green infrastructure
projects, renewable energy sources
and energy system modernisation,
which can increase demand for
Dalekovod products.
>Overview of transition risks of the
DALEKOVOD GROUP
Own
businessDownstream
Medium
to long
term
PRODUCTS
AND
SERVICES
Reputational
aspects and
goals of
decarbonization
ESG investors favor companies with
clear decarbonization strategies and
favor sustainable projects, which
allows for more favorable financial
conditions through green bonds and
credit lines.
>Overview of transition risks of the
DALEKOVOD GROUP
Own
businessDownstream
Medium
to long
term
PRODUCTS
AND
SERVICES
Adaptation of
products to
climatic
extremes
Significantly increased requirements
for the design of products adapted
to the climatic conditions of the
location where they will be installed,
as well as the regime in which they
will operate (e.g. increase in ambient
temperature, prolonged phases of
high overload...)
Own
businessDownstream
Medium
to long
term
74
RESISTANCE
Adaptation of
infrastructure
Improving and maintaining
infrastructure to make it more
resilient to climate change. In the
context of our own business, there
is significant growth potential for
this opportunity in the short term
until the planned adjustment
measures are implemented. In the
context of customers, long-term
growth is expected.
Own business,
downstream
Medium
to long
term
Description of the procedures for identifying and assessing significant
climate change impacts, risks and opportunities
E1. IRO-1 Climate change mitigation
E1. IRO-1_01, E1. IRO-1_09, E1. IRO-1_10, E1. IRO-1_11, E1. IRO-1_12, E1. IRO-
1_13, E1. IRO-1_14, E1. IRO-1_15, E1. IRO-1_16
Dalekovod Group, as well as the entire economy, is facing an accelerated global transition
to a low-carbon economy, driven by regulatory, market and technological changes.
Under the auspices of the new Corporate Reporting Directive (CSRD). Corporate
Sustainability Reporting Directive) prescribes the European Sustainability Reporting
Standards (ERSR). European Sustainability Reporting Standards).
European standards, (hereinafter referred to as ESRS) strongly encourage the use of
scenario analysis (e.g. using RCP and SAA scenarios) to demonstrate the resilience of the
strategy in different climatic and market conditions.
In accordance with the environmental standards within ESRS E1, the identification,
assessment and disclosure of risks and opportunities related to climate change, especially
transition risks, is required.
Figure 1. Examples of climate-related transition events as presented under ESRS E1 – AR 12
Policy and Legal Issues Technology Market Reputation
Higher greenhouse gas
emission prices
Replacement of existing
products and services with
lower-emission options
Changes in user behavior Changes in consumer preferences
Increased emission
reporting obligations
Unsuccessful investments in
new technologies
Market signal uncertainty Sector stigmatization
Authorization for existing
products and services and
their regulation
Costs of transitioning to low-
emission technology
Increased raw material costs Increased stakeholder concerns
Examples of climate-related transition events (based on the classification of the Task Force on Climate-related Financial
Disclosures (TCFD)
75
The aim of this report is to ensure the resilience, competitiveness and sustainable growth
of the Group through proactive strategic planning and transparent reporting.
The transition risk analysis encompasses changes in legislation, the economy and societal
expectations towards a low-carbon economy.
In accordance with the requirements of the TCFD (Eng. Task Force on Climate-related
Financial Disclosure) Technical Supplement on Scenario Analysis (2017) and TCFD
Guidance on Scenario Analysis for Non-Financial Companies (2020). It is necessary to
include the following elements:
• Time horizon (short, medium, long-term)
• Analysis of potential financial effects
• Expected opportunities and adaptation strategies
• Business model resilience assessment
Analyzing transition risks and opportunities through the moderate scenario RCP 4.5/ SSP
2, it can be concluded that Dalekovod Group has significant opportunities, but also
challenges in maintaining competitiveness and compliance with regulatory requirements.
An overview of the key risks and opportunities arising from the analysis of transition
events:
• Regulatory and political risks:
- The increase in the cost of emission allowances and taxes on greenhouse gas
emissions within the EU ETS system brings the need for continuous adjustment of
business processes and the use and procurement of resources, materials and
technology.
- Compliance with ESRS standards requires increased transparency in emissions
reporting, ESG policies and practices, and sustainability strategies.
• Technological challenges and opportunities:
- Investments and implementations in green technologies and digitalization are
necessary for Dalekovod to remain competitive and follow the direction and growth
of the market in a sector that is increasingly focusing on the electrification of
infrastructure and transport, smart solutions, but also the increased demand for
electricity from renewable sources required by the expansion of networks.
- The "Draghi Report 2024" emphasizes the importance of implementing "smart grid"
solutions, which opens up the opportunity for Dalekovod Group to become a regional
leader in this segment.
• Market trends:
76
- The market increasingly favors low-carbon products, which means that the
competitive advantage will depend on the speed of adaptation of Dalekovod to new
customer requirements.
- The EU continues to encourage green infrastructure and renewable energy sources,
which can increase demand for Transmission Line products.
• Reputational aspects and ESG standards:
- An increasing number of investors in the EU are favoring companies with clear
decarbonization strategies.
- ESG reporting and transparency in business are becoming key factors for access to
favorable forms of financing (green bonds, ESG credit lines).
• Financing and capital:
- Access to capital will depend heavily on the Group's ability to demonstrate climate
resilience and its ability to innovate.
- The use of EU funds for the energy transition can reduce adaptation costs and
accelerate the implementation of new technologies.
Strategic guidance to mitigate risks and seize opportunities:
Portfolio diversification – continued development of both conventional and green
solutions, depending on market needs.
Green finance – using ESG criteria to access affordable loans and bonds.
Strengthening innovation and digitalisation – investments in smart grids, energy
storage and sustainable mobility.
Reputation management – transparent ESG reporting, stakeholder involvement, and
strategic partnerships with regulators and financial institutions.
Taking into account all of the above, Dalekovod recognizes the transition to sustainability
as an opportunity for long-term growth and strengthening of the market position in the
European and global context with investments in more efficient production technologies.
Resilience to transition risks:
The transmission line shows high resilience to transition risks in moderate scenarios (RCP
4.5 + SSP2), but faces challenges in extreme scenarios.
Recognized to increase the resilience of the business model:
• Investing in innovation and green technologies – ensure competitiveness in all
scenarios.
• Diversification of markets and products – reduce vulnerability to regulatory and
market changes.
• ESG integration into business strategies – increase reputational resilience and
access to capital.
77
• Scenario planning and adaptation of business models – to ensure flexibility in
different economic and regulatory conditions.
• Proactive management of transition risks in order to preserve long-term
competitiveness and market position.
Adaptation to climate change
E1. IRO-1_02 Description of the procedures for identifying impacts, risks and
opportunities related to physical climate risks in own operations and along the value
chain
Physical impacts, risks and opportunities related to climate change adaptation identified
on the basis of the analysis of the Climate Risk and Vulnerability Impact Assessment
(CRVA) Climate Risk and Vulnerability Assessment) steps required by ISO 14091 Climate
Change Adaptation – Guidance on Vulnerability, Impacts and Risk Assessment (ISO
14091:2021; EN ISO 14091:2021).
In the first step, the sensitivity of Dalekovod's business operations and assets was
assessed. Sensitivity is assessed as 'high', 'moderate' and 'negligible' depending on the
potential damage, due to the climate hazard, irrespective of its location.E1. IRO-1_03).
Sensitivity was evaluated with respect to taxonomy-eligible activities 3.1, 3.20 and 6.15
with four aspects necessary for the functioning of the activity (assets, input parameters to
the business process, output parameters from the business process, and the
production/business process itself, including turnover. The classification of physical
hazards posed by climate change that are required for the implementation of the CRVA
under Directive (EU) 2022/2464 on corporate sustainability reporting, ESRS E1 Climate
change can be found in the following table (Table 2.1).
Table 2.1 Classification of hazards posed by climate change according to Appendix A of
Commission Delegated Regulation (EU) 2021/2139
Temperature
Wind
Water
Solid mass
Chronic
Temperature
changes
Changes in
wind currents
Changes in
precipitation
patterns and type
Coastal erosion
Temperature
stress
Precipitation
variability or
hydrological
variability
Soil degradation
Temperature
variability
Ocean acidification* Soil erosion
Melting Eternal
Ice*
Salt water
penetration
Solifluctuation*
78
Temperature
Wind
Water
Solid mass
Sea level rise
Water shortage
Acute
Heat wave
Cyclone,
hurricane,
typhoon*
Drought Avalanche*
Cold wave/frost
Storm
Heavy precipitation
Landslides /
Landslides
Fire
Floods
Soil subsidence
Tornado* Glacial lake outflow*
*Hazards that do not occur or are very rare and of lower intensity in the territory of the
Republic of Croatia. The current and projected impact, i.e. the consequences of the occurrence
of rare climatic hazards, for example in the case of tornadoes, are negligible. These are
hazards for which data for the territory of the Republic of Croatia do not exist, so they have
not been analyzed in the physical risk assessment.
In the second step, the exposure of geospatial locations of Dalekovod's assets (within the
CRVA Dalekovod Group) in Croatia, Norway and Sweden, which are the primary markets of
the companies from which the largest part of the revenue is generated, was analyzed
cartographically, using GIS software. The analysis was based on available or derived
relevant and verified cartographic bases of European and Croatian institutions in raster
and vector form that represent climate variables or disasters for acute and chronic climate
hazards that were assessed as "moderate" and "high" in the previous step (E1. IRO-
1_04). The climate model used in the analysis of hazards for which there are climate
scenarios is CRODEX Europe. Two climate development scenarios RCP 4.5 and RCP 8.5
(E1. IRO-1_08). Data on the exposure of the location of the assets and the business
process of Dalekovod were analyzed in three periods (E1. IRO-1_05). The exposure of
Dalekovod's assets and business process to physical, acute and chronic hazards arising
from climate change in a particular geolocation (selected spatial unit) may not exist or is
categorized as negligible, moderate or high.
The third step is a vulnerability analysis, which is a combination of the results of the
sensitivity analysis and the exposure analysis categorized as negligible, moderate or high.
Vulnerability is the basis for deciding whether to carry out a risk assessment phase,
depending on the assessment of climate hazards (E1. IRO-1_06).
In the fourth step, for climate hazards assessed as "moderate" or "high" vulnerability (E1.
IRO-1_07) analysed the significance of physical risk by combining the probability of
occurrence of an event and the consequences associated with that event. The scale for
79
assessing the severity of the risk-related impact and the assessment of the likelihood of
hazards occurring is taken from the Technical Guidance on Preparing Infrastructure for
Climate Change 2021-2027 (2021/C 373/01). The estimated risk for the identified climate
hazards to which the assets and business process of Dalekovod may be vulnerable was
further justified with regard to the expected impact on business and damage to property,
and risk reduction measures were proposed.
E1. IRO-1_03 Climate-related hazards identified in the short, medium and long term
The classification of physical hazards posed by climate change that are required to carry
out the assessment of physical climate risks in accordance with Commission Delegated
Regulation (EU) 2021/2139 and the requirements of ESRS E1 Climate change can be
found in the table above (Table 2.1). Classified physical climate hazards from the table
were used in the assessment of the sensitivity of the Transmission Line activity, the
cartographic analysis of the exposure of the property locations and the vulnerability
assessment, which is a function of the intensity of sensitivity and exposure. A risk has
been identified at the locations of Dalekovod's assets for the following climatic hazards in
the short, medium and long term:
• Chronic and acute temperature-related hazards
• heat waves
• forest fires
• storms and heavy precipitation
• floods
• risk of avalanches and landslides.
E1. IRO-1_04 Verification of the exposure of assets and business activities of
companies to physical climate hazards
Classified physical climate hazards represented by a single climate variable were analyzed
using GIS technologies according to available verified cartographic bases. The exposure of
the submitted locations of the Dalekovod assets (in the form of a list of cadastral parcels)
to physical climatic hazards was analyzed in current and future climatic conditions
according to two climate scenarios RCP4.5 and RCP8.5 in three periods up to the middle
of the 21st century. The general bases used are the official data of the State Geodetic
Administration of the Republic of Croatia, and refer to the digital orthophoto map, digital
elevation model, topographic map, administrative boundaries and cadastre. Data sources
for climate variables are taken from the official websites of European and Croatian
institutions or have been requested through official channels. The sources are listed
according to the segments of the analysis of physical, acute and chronic climatic hazards:
80
• temperature
o The Intergovernmental Panel on Climate Change (IPCC) Intergovernmental
Panel on Climate Change)
o EFFIS (eng. European Forest Fire Information System)
o Norwegian Centre for Climate Services
o Official website of the Swedish Meteorological and Hydrological Institute,
SMHI
• solid mass
o EUSO Soil Degradation Dashboard
o Basic geological map M 1: 300 000 of the Croatian Geological Survey
• water
o IPCC
o River Basin Management Plan 2027 (Official Gazette, No. 84/2023) – digital
data of Croatian Waters have been requested through official channels
o IPCC 6th Assessment Report Sea Level Projections
• wind
o IPCC
o Results of climate modelling on the HPC Velebit system for the purpose of
drafting the Climate Change Adaptation Strategy of the Republic of Croatia
until 2040 with a view to 2070 and the Action Plan; Addition to the results of
climate modelling on the HPC VELEbit system: Basic results of integration at
a spatial resolution of 12.5 km (Sub-activity 2.2.1).
For the secondary effects of climate change for which there are no climate scenarios
available, the map data is based on existing publicly available variables that are assumed
to continue to occur according to the intensity of the primary climate variables.
E1. IRO-1_05 Defined short-, medium-term and long-term time periods
The short-, medium- and long-term time periods of physical risk assessment have been
defined in accordance with the CORDEX Europe model projections used and climate
scenarios RCP 4.5 and RCP 8.5 for climate variables available on the official website of the
Intergovernmental Panel on Climate Change (IPCC). Intergovernmental Panel on Climate
Change (IPCC). Although the risk of extreme weather and climatic disasters is most
significant in the period up to the end of the 21st century, the average lifespan of assets,
the time frame of strategic planning and the capital allocation plan of Dalekovod does not
extend beyond the middle of the 21st century. Therefore, the assessment of physical risks
81
in the period up to the middle of the 21st century is strategically the most relevant.
Therefore, the short-term time period represents simulations of the current climate
whose data cover the historical period (P0), while the expected changes (projections) for
the future climate are defined in two periods: medium-term from 2011/2021 to 2040. (P1
- immediate future) and in the long term from 2041 to 2060/2070. (P2- climate of the
middle of the 21st century). Climate change is defined as the differences in the values of
climate variables between the period 2021-2040 and 1981-2010. (P1 -P0) and the
periods 2041-2060 and 1981-2010. (P2 - P0).
E1. IRO-1_06 Quantified assessment of the exposure and vulnerability of the
company's assets and business activities to the identified climate-related hazards
The sensitivity of the analysed taxonomy eligible activities numbers 3.1, 3.20 and 6.15
(business activities) is assessed regardless of the location of the asset with regard to
primary climate variables and their secondary effects from the aspect of four elements
necessary for the functioning of the activity:
I. Assets in the field of activity (infrastructure)
II. Input or input for a business process (e.g. water, energy, raw material, materials,
equipment, machinery, people)
III. The output or output of a business process (e.g., product, material, service)
IV. Business/production process (e.g. production, construction, service), including
turnover
Sensitivity is evaluated with the ratings "high", "moderate" and "negligible", where "high"
sensitivity means that the climatic event can significantly affect an element of the activity,
"moderate" sensitivity that the climate hazard can have a slight impact, and "negligible"
sensitivity that the climatic event has no impact on the element of activity. Each element
of the activity and climate hazard is assigned an estimated value. The analysis determines
that the activities of the Power Line are sensitive to: Temperature changes, Temperature
stress, Changes in wind flows, Precipitation variability, Heat wave, Cold wave/frost, Forest fire,
Storm, Heavy precipitation (rain, hail, snow/ice), Floods, Avalanche and Landslide.
For those climate hazards for which the sensitivity is assessed as 'moderate' and 'high',
the exposure of the activity and the location of the asset to current and future climate
hazards shall be determined in accordance with the same assessments for valuation. The
analysis determined that the locations of the Transmission Line assets will be exposed to
the following hazards: Temperature changes, Temperature stress, Heat wave, Forest fire,
Heavy precipitation, Floods, Avalanche and Landslide.
82
E1. IRO-1_07 Assessment of exposure and vulnerability to identified climate hazards
based on pessimistic climate scenarios
The estimated exposure to physical climate hazards based on the RCP8.5 scenario for all
climate hazards for which the sensitivity was assessed as moderate and high. The climate
scenario RCP8.5 is a pessimistic scenario based on high concentrations of greenhouse
gases in which heat radiation (in W/m2) will be +8.5 by 2100 compared to pre-industrial
values, i.e. the global surface temperature will rise between 4° and 5° by 2100.
The business activities and assets of the Power Line will be negligible exposed to the
following hazards: Changes in wind flows, Changes in precipitation patterns and type,
Precipitation variability, Saltwater intrusion, Sea level rise, Water scarcity, Drought, Coastal
erosion, Soil degradation, Soil erosion, Cold wave/frost, Storms, Heavy precipitation, Landslide
and Subsidence.
The business activities and assets of Dalekovod will be moderately vulnerable to the
following hazards: Temperature changes, Storms and heavy precipitation. The change or
increase in the average maximum daily temperature at the locations of Dalekovod's
assets and activities in the pessimistic scenario of climate development is about 2-2.5°C
compared to historical data. Although this potentially slows down business continuity in
the Republic of Croatia due to the impact on the psychophysical health of workers, in the
Scandinavian countries it is an opportunity and an opportunity to extend the period in
which the activity can be performed without the harmful effects of low temperatures.
Storms and heavy rainfall slow down the business process, cause material damage to the
above-ground infrastructure with the possibility of interruption of work due to the fall of
vegetation on the infrastructure and interruption of energy supply.
The business activities and assets of Dalekovod will be highly vulnerable to the following
hazards: Temperature stress, Heat wave, forest fire, Floods, Avalanche and Landslide. By the
middle of the 21st century, the number of hot showers is projected to rise to over 20 days
for the pessimistic scenario of climate development. As a result of the increase in the
average annual temperature and secondary effects such as droughts, water shortages,
heat waves, it is expected that there will be an increase in the risk of fires. Temperature
stress in the form of an increase in the number of hot days can affect the psycho-physical
health of employees, while fires leave the system dysfunctional, with the possibility of
injury to workers. Floods, landslides and avalanches make it impossible to carry out the
business process, traffic; They damage and carry away infrastructure, causing damage
with a very extensive impact (e.g. downtime or network failure, non-functionality of
83
assets, fatalities, long-term environmental remediation. This can be prevented already
during the design of the infrastructure with additional protection measures.
The extremely high risk to the property and business activities of Dalekovod has not been
assessed for any climate hazard.
E1. IRO-1_08 Explanation of how climate scenario analysis has been used to inform the
identification and assessment of physical risks over the short, medium and long term
The climate scenarios used in the assessment of physical risks are greenhouse gas
concentration scenarios (GHG concentration scenarios). Representative concentration
pathways (RCPs) are trajectories of greenhouse gas concentrations (rather than
emissions) that describe the possible future increase in global surface temperature,
depending on how many greenhouse gases will be in the atmosphere in the coming years.
Two climate scenarios were selected in the assessment:
• RCP4.5 scenario with stabilizing greenhouse gas concentrations in which the radiant
heat (in W/m2) will be +4.5 by 2100 compared to pre-industrial values, i.e. the global
surface temperature will not exceed 2° by 2100
• RCP8.5 scenario with high concentrations of greenhouse gases in which heat
radiation (in W/m2) will be +8.5 by 2100 compared to pre-industrial values, i.e. the
global surface temperature will rise between 4° and 5° by 2100.
Climate scenarios were used in the analysis of the exposure of the locations of the
Dalekovod property to current and future climatic conditions according to the available
cartographic data for climate variables for which the sensitivity was evaluated as
"moderate" and "high". A methodology for evaluating current and future exposure (high,
moderate, negligible, no occurrence) has been set. In the first step, a cartographic analysis
of the submitted cadastral parcels was made in GIS software according to the official data
of the State Geodetic Administration of the Republic of Croatia and Swedish and
Norwegian institutions. Then, using geographic information provided by cartographic
bases for physical hazards, the exposure of the submitted property locations was
evaluated in relation to the hazards brought by climate change.
The cartographic representation of the exposure of the locations of the Dalekovod assets
to physical climate hazards according to climate scenarios included the analysis of primary
climate variables: Temperature Changes, Temperature Variability, Changes in Wind Flows,
Precipitation Variability and Heavy Precipitation , as well as secondary effects of climate
change: Heat wave, Cold Wave and Storms. For the secondary effects of climate change for
which there are no climate scenarios available, the map data is based on existing publicly
84
available variables that are assumed to continue to occur according to the intensity of the
primary climate variables.
Policies related to climate change mitigation and adaptation
E1-2 E1. MDR-P_01-06 Policies in place to manage significant impacts, risks and
opportunities related to climate change mitigation and adaptation
The Dalekovod Group's climate policies are described through the Dalekovod Sustainability
Policy and the Energy Efficiency Policy, and are implemented through concrete measures
and allocated resources, although the formalized plan of activities has not yet been
consolidated. In practice, Dalekovod Group undertakes a number of activities aimed at
reducing its carbon footprint and increasing energy efficiency. The key actions are listed
below, with a clear division into those already implemented and those planned, together
with the associated resources:
Implemented measures:
- Increasing the energy efficiency of plants and buildings: Measures were
implemented to modernize and renovate infrastructure (e.g. replacement of
obsolete equipment with more energy-efficient ones, thermal insulation of
buildings, optimization of lighting), which reduced energy consumption per
unit of product/service. These activities were accompanied by the
implementation of energy audits and consumption monitoring through the
ISO 50001 system, which includes the commitment to:
- continuous improvement of energy performance,
- providing the necessary information and resources to achieve the guidelines
and objectives;
- compliance with all applicable legal and other requirements that the
organization is bound by, and related to the application and consumption of
energy, and energy efficiency
- procurement of energy-efficient products and services, as well as the
inclusion of requirements to increase energy efficiency in design.
- continuous improvement of energy performance and SUEn
• Electromobility infrastructure: Charging stations for electric vehicles have
been installed at Dalekovod Group locations, encouraging the transition to a
lower emission fleet. This allows employees and guests to charge electric cars
and supports the internal use of electric vehicles, contributing to the reduction
of transport emissions.
• Optimization of processes and materials: Improvements that reduce
emissions (e.g. reduction of energy losses, efficient logistics) are continuously
85
sought in production processes, and materials and components with a lower
carbon footprint are selected wherever possible. At the same time, given the
high awareness of investors, eco-design standards are followed in product
design so that products have a lower impact on the climate during their life cycle.
Planned measures:
• Developing and implementing the climate transition plan: In 2025, the
development of a comprehensive plan for the transition to net-zero emissions
will begin. The plan will define steps to achieve long-term climate goals (e.g.
gradual emission reductions by 2030 and climate neutrality by 2050), with
detailed actions per organisational unit. The plan is expected to be adopted by
the end of 2026, and its implementation will be a key focus in the coming period.
• Improving energy efficiency: Energy renovation and process optimization
projects will continue to further reduce energy consumption per unit of
revenue. Additional investments in equipment upgrades, automation and real-
time consumption monitoring systems are planned to maintain or exceed this
target.
• Monitoring and reporting: An even more robust system for monitoring the
achievement of climate action and targets will be put in place. This includes
regular internal reports on energy consumption and emissions, monitoring the
achievement of set KPIs (key performance indicators) and annual reporting to
the Management Board on progress towards the targets. This monitoring
system will ensure the timely identification of deviations and, if necessary, the
adaptation of measures.
E1. MDR-T_01-13 Monitoring the effectiveness of policies and measures through
objectives [see ESRS 2 MDR-T]
As part of its strategy, Dalekovod Group has set clear climate goals – quantitative and
qualitative – to guide climate change mitigation activities and monitor their success.
Quantitative goals have specific values and deadlines, while qualitative goals focus on
strategic initiatives and ongoing improvements. Below are the main climate goals of
Dalekovod Group with indicated target values, timeframes, status of achievement by the
end of 2024 and a plan for further monitoring:
Strategic goal 1. Reducing emissions from Scope 1 and 2, with the net-zero transition
initiated.
Goals with defined values:
• Greenhouse gas emission reductions (Scope 1 and 2): The goal is to reduce
total Scope 1 and 2 emissions by 45% by 2030. compared to the base year 2019.
Instead of decreasing, emissions increased by about 3% by the end of 2024
compared to 2019, which is partly due to expanding business volumes but also
86
improved emissions data. Namely, compared to 2019, the coverage of data
taken into the calculation of the greenhouse gas emission inventory during 2023
and 2024 has increased significantly - the coverage and flow of data have been
improved, as well as the quality of the data. This indicator will be a key point of
the transition plan; In the course of 2025, revised sub-targets and activities will
be set to reverse the emissions trajectory downwards. Progress towards the
target will be monitored annually and reported.
• Increase energy efficiency: The goal is to increase energy efficiency by 35%
by 2026. (compared to 2019, measured as the ratio of energy consumption to
income or production volume). An improvement of ~24% was achieved, which
means that the target has already been exceeded before the deadline. This
improvement is the result of a series of energy efficiency measures
implemented. The Group will strive to maintain and further improve this trend,
with continuous monitoring of efficiency on an annual basis.
• Share of renewable energy in consumption: The goal is to provide 35% of
total energy consumption from renewable sources (internal and external) by
2026. It is estimated that at the level of the Končar Group, about 27% of the total
energy consumption in 2024 is covered from renewable sources, which includes
green electricity and its own production. Further investments in RES (e.g. new
solar panels) and the purchase of additional green energy are planned to reach
the target of 35%. The achievement of this goal is monitored through the Group's
energy balance and the trend in the share of RES will be evaluated every year.
• Own green energy production: The goal is to produce 15% of the Group's
electricity needs from its own renewable sources by 2026 (primarily through
photovoltaic power plants). Status 2024: Currently, at the level of the Končar
Group, own solar power plants cover about 7% of electricity consumption.
Projects are underway to install additional capacities (e.g. expansion of existing
solar power plants and installation of new ones) in order to reach or exceed the
target 15%. Progress is measured according to the MWh produced from own RES
on an annual basis.
Note: All of the above targets and indicators will be monitored on a regular basis and
progress will be reported as part of the annual sustainability reports. In the event of
deviations from the planned, Dalekovod Group will take corrective measures and, if
necessary, update its climate strategies to remain aligned with the goals of the Paris
Agreement and the National Energy and Climate Plans.
87
Targets related to climate change mitigation and adaptation
E1-4 E1. MDR-T_01-13 Monitoring the effectiveness of policies and measures through
objectives [see ESRS 2 MDR-T]
Dalekovod Group sets efficiency measures and monitors them through the ISO 50001
management system.
Energy consumption and combination of energy sources
E1-5 Dalekovod Group monitors the use of energy and fuel consumption from crude oil and
petroleum products, which can be found in a separate table on the next page and shows
six different types of fuels used in our companies. The company is committed to the
responsible use of energy and resources that are announced in the Sustainable Business
Policy and includes the following principles:
• Continuously work on increasing the energy performance of the company by
adopting and implementing a program of energy guidelines and goals.
• Provide resources and information that are necessary to carry out the necessary
activities of the energy management system.
• Monitor and comply with all applicable legal requirements and regulations in the
field of energy efficiency and energy application and consumption.
• In the procurement of energy, machinery and other equipment, as well as in
investments and reconstructions, include requirements for energy efficiency to the
extent that it is economically justified.
• To encourage awareness of the rational use of energy among employees and other
persons under the supervision of the company.
Energy consumption in the Dalekovod Group is shown in the table below.
Energy consumption by energy sources:
ESRS
Codes
Energy consumption and combination of
energy sources
Comparative 2023 Year 2024
E1-
5_10
(1) Fuel consumption from coal and coal
products (MWh)
0 0
E1-
5_11
(2) Fuel consumption from crude oil and
petroleum products (MWh)
15,157.03 17,918.89
E1-
5_12
(3) Fuel consumption from natural gas
(MWh)
0 0
E1-
5_13
(4) Fuel consumption from other fossil
sources (MWh)
0 0
88
ESRS
Codes
Energy consumption and combination of
energy sources
Comparative 2023 Year 2024
E1-
5_14
(5) Consumption of purchased or acquired
electricity, heating, steam and cooling
energy from fossil sources (MWh)
6,018.95 6,623.02
E1-
5_02
(6) Total fossil fuel energy consumption
(MWh) (calculated as the sum of rows 1
to 5)
21,175.99 24,541.91
E1-
5_15
Share of fossil energy in total
energy consumption (%)
96% 88%
E1-
5_03
(7) Consumption from nuclear sources
(MWh)
0 0
E1-
5_04
Share of energy from nuclear
sources in total energy
consumption (%)
0 0
E1-
5_06
8) Fuel consumption for renewable sources
including biomass (which includes both
industrial and municipal waste of biological
origin, biogas, renewable hydrogen, etc.)
(MWh)
0 0
E1-
5_07
(9) Consumption of purchased or acquired
electricity, heating, steam and cooling
energy from renewable sources (MWh)
949,29 3,448.82
E1-
5_08
(10) Consumption of energy from
renewable sources from self-production
other than fuels (MWh)
0 8,6
E1-
5_05
(11) Total consumption of energy from
renewable sources (MWh) (calculated as
the sum of rows 8 to 10)
949,29 3,457.42
E1-
5_09
Share of energy from renewable
sources in total energy
consumption (%)
4% 12%
E1-
5_01
Total energy consumption (MWh)
(calculated as the sum of rows 6 and 11)
22,125.28 27,999.33
E1-5_11 Fuel consumption from crude oil and petroleum products
Fuel consumption from crude
oil and petroleum products
Comparative
(previous period)
Year 2024.
(1) Gasoline (liters)
1,052,402.74
72,808.64
(2) Diesel (litres) 71,296.72 1,341,164.41
(3) Fuel oil (liters)
227,000
165,176
(4) LPG (kg) 3,656 6,449
(5) Natural gas (m3)
0
0
(6) Helicopter fuel 179,524.99 188,839
89
E1-5_17 Dalekovod Group did not produce non-renewable or renewable energy in this financial
year.
E1-5_18 Energy intensity from activities in sectors with a significant impact on the
climate (total energy consumption per net income)
E1-5_19 Total energy consumption from activities in sectors with a significant impact
on climate
E1-5_20 Sectors with significant climate impact used to determine energy intensity
The sectors with a significant impact on the climate are those listed in NACE Divisions A to
H and Section L (as defined in Commission Delegated Regulation (EU) 2022/1288).
The sectors with a significant impact on the climate were identified at the NACE activity
level associated with the Group's operations. As all activities of the Dalekovod Group,
according to the definition of the ESRS, belong to the sectors that affect the climate,
primarily area C - Manufacturing, the energy in the total amount is viewed in relation to
the total net income of the Dalekovod Group.
Total energy consumption from activities in sectors with significant climate impact per net
activity income:
Energy intensity by net income
Comparative
2023
2024
Total energy consumption from activities in
climate-significant sectors per net activity income
in climate-significant sectors (MWh/monetary
unit)
0.133
MWh/million
EUR
0.143 MWh/
million EUR
E1-5_21 Disclosure of reconciliation with relevant items or notes in the financial
statements of net income from activities in sectors with a significant impact on climate
Net revenues from activities in sectors with a significant impact on climate used to
calculate energy intensity amounted to EUR 195 million in 2024. In 2023 revenues in
these sectors amounted to EUR 166 million.
Gross Scope 1, 2, 3 GHG Emissions and Total GHG Emissions
E1-6 The Dalekovod Group has calculated gross greenhouse gas emissions from Scope 1 and Scope 2
with the reference year 2019 in accordance with the Dalekovod Sustainability Strategy 2024-
90
2026, and the calculation for Scope 3 emissions, which was calculated for the first time in 2024 is
also presented. The data are all presented in the table below and an explanation of the calculation
methodology follows.
Breakdown of greenhouse gas emissions - by country, operating segments, economic activity,
subsidiary, greenhouse gas category or type of source:
Retrospective
2019
2023
2024
% N/N-1
Scope 1 gross GHG emissions
(tonnes of CO2 equivalent)
5,013.22 4.141.31 4.862.21
17%
Percentage of Scope 1 GHG
emissions from regulated ETPs
(%)
- - - -
Gross Scope 2 GHG emissions
based on location per tonne of
CO2 equivalent
1,333.69 1,354.21 1,295.77
-4%
Gross Scope 2 GHG emissions
based on a market approach
(tonnes of CO2 equivalent)
1,391.32 1,315.44 918.78
-30%
Total gross indirect Scope 3
greenhouse gas emissions
(tonnes of CO2 equivalent)
- -
57,210.57
-
1. Purchased goods and
services
- -
50,347.97
-
2. Capital goods
-
-
4,279.29
-
3 Fuel and energy related
activities (not included in Scope
1 or 2)
- - 1,126.61 -
4 Transportation and
distribution at a higher level
- - 540.30 -
5 Waste generated in the
course of business
- - 21.65 -
6 Business trips
-
-
635.68
-
7 Employee commuting
-
-
259.06
-
8 Leased assets at a higher
level of the value chain
Emissions are already included in Scope 1 in Scope 2
9 Lower-level transportation Emissions are already included in Scope 3 Category 4
91
Retrospective
2019
2023
2024
% N/N-1
10 Processing of products sold Not included – emissions are not significant
11 Use of Sold Products
-
-
0
-
12 End-of-Life Processing of
Products Sold
- - 0 -
13 Leased assets downstream
of the value chain
- - 0 -
14 Franchises
Not included – not changeable
15 Investments - - 0 -
Total greenhouse gas
emissions (based on location)
(tonnes of CO2 equivalent)
- - 63,368,55 -
Total greenhouse gas
emissions (based on market)
(tonnes of CO2 equivalent)
- - 62,991.56 -
ESRS codes: E1-6_01, E1-6_02, E1-6_03.
Dalekovod Group will set GHG emission reduction targets and implementation periods
during 2025 as part of the development of the transition plan.
E1-6_23 Disclosure of types of contractual instruments used for the sale and purchase
of energy related to energy production characteristics or for requirements on separate
energy characteristics
For each Scope 1 and Scope 2 and Scope 3 categories, the total greenhouse gas emissions
(CO₂, CH₄, N₂O, HFCs, PFCs and SF₆) expressed in metric tonnes of CO₂ equivalent (tCO2eq),
excluding biogenic CO₂ emissions, independently of any greenhouse gas trades, such as
the purchase, sale or transfer of offsets or allowances.
• List of Scope 1 activities:
o Direct emissions from stationary sources
o Direct emissions from mobile sources
o Direct emissions from production processes (process emissions)
o Direct fugitive emissions
o Direct emissions from removals due to land use, land modification and forestry
are not reported in this document, as data are not collected (not available).
• List of Scope 2 activities:
92
o Indirect emissions from the production of purchased electricity, steam, heating
and cooling used by the organization. These emissions are caused by the
production of energy consumed by the organization, but it is generated at a
source outside the direct control of the organization.
• List of Scope 3 categories and activities included in the emission inventory:
Scope 3 includes:
o Emissions from activities in the value chain of entities included within the
organizational boundaries of the company.
o Emissions from leased assets, investments, and franchises that are excluded
from the company's organizational boundaries, but which are partially or wholly
owned or controlled by the company
List of Scope 3 categories:
Upstream Emission Stream
Category 1 - Materials and Services
Category 2 - Capital goods
Category 3 - Fuel and energy consumption
Category 4 - Upstream transport and distribution
Category 5 - Waste produced
Category 6 - Business Travel
Category 7 - Employee commuting
Category 8 - Upstream lease
Downstream Emissions
Category 9 - Downstream Transport and Distribution
Category 10 - Processing of products sold
Category 11 - Use of products sold
Category 12 - End of Life Cycle of Products Sold
Category 13 – Downstream Rentals
Category 14 – Investments
• List of Scope 3 categories or activities excluded from the inventory, with an
explanation for their exclusion:
93
Category 10 — the data were not sufficient for a reliable calculation and the
emissions in this category were estimated to be non-significant (described in
Chapter 3.10)
Category 14 – not included as it is not relevant to the Dalekovod Group.
• Establishment of the reference year:
o The base year for reporting greenhouse gas emissions is determined to allow
for consistent monitoring and comparison of emissions over time. In the case
of Dalekovod Group, 2019 was chosen as the reference year for Scope 1 and
Scope 2, in accordance with the Dalekovod Sustainability Strategy 2024-
2026.
• Reasons for not setting a reference year for Scope 3
o For Scope 3 emissions (value chain emissions), 2024 is the first reporting
year. The reason for this is that Scope 3 emissions have been calculated at
the level of the Dalekovod Group for the first time. During 2023 a gap
analysis was conducted, the result of which showed the need to start
monitoring and collecting relevant data for this range of emissions.
o As Scope 3 covers a wide range of emission sources (e.g. emissions from
procurement, transport, product use), its monitoring requires the
establishment of new methodological frameworks and the provision of
reliable data from external stakeholders. Therefore, the first data collected
from 2024 will serve as the basis for future monitoring and analysis, and the
base year for Scope 3 will be determined during the development of the new
Dalekovod Group Sustainability Strategy and the calculation policy for the
reference year will be established. It will be possible to update the data to
ensure consistency with methodological improvements and new available
data in the future.
• For each category of Scope 1, Scope 2 and Scope 3, the document provides in detail: a
description of the types and sources of data, including activity data, emission factors
and GWP values used for the calculation of emissions, as well as a description of the
quality of the reported data.
In addition, the reported assessments of the quality of the data used in the
calculation of Scope 3 were made according to the following criteria:
Categories of assessment of the data required for the calculation of emissions
94
• Temporal
representativeness
• The degree to which a dataset reflects the actual time (e.g. year)
or age of an activity.
• Geographical
representativeness
• The degree to which the dataset reflects the actual geographical
location of the activity (e.g. country or location).
• Completeness • The degree to which the data are statistically representative of the
relevant activity. Completeness includes the percentage of locations for
which data is available and used relative to the total number of locations
associated with a particular activity. It also takes into account seasonal and
other normal fluctuations in data.
• Reliability • The degree to which the sources, data collection methods, and
verification procedures used to obtain the data are reliable.
Description of the categories for the assessment of the data required for the calculation of
emissions
Rating Technology Time Geography Integrity Reliability
Very
good
Data
generated
using the
same
technology
Data less
than 3
years old
Data from
the same
region.
Data from all relevant
locations for a sufficient
period of time to
compensate for normal
fluctuations
Verified³ data
based on
measurements⁴
Good
Data
generated
using similar
but different
technologies
Data less
than 6
years old
Data from
a similar
region
Data from more than
50% of locations over a
sufficient period of time
to compensate for
normal fluctuations
Verified data
partially based
on assumptions
or unverified
data based on
measurements
Satisfac
tory
Data
generated
using
different
technologies
Data less
than 10
years old
Data from
another
region
Data from less than
50% of locations for a
sufficient period of time
to compensate for
normal fluctuations, or
more than 50% of
locations but for a
shorter period of time
Unverified data
partially based
on assumptions
or qualified
estimation (e.g.
by industry
experts)
Bad
The
technology of
data is
unknown.
Data
more
than 10
years old
The data
region is
not known
Data from less than
50% of locations over a
shorter period of time
Unqualified
assessment
95
or the
age of
the data
is
unknown
or representativeness
is unknown
³ Verified data refers to data verified through standardized quality assurance procedures.
⁴ Measurements include directly collected data through instruments or sensors.
• For each Scope 3 category, a percentage of emissions calculated based on data obtained
from suppliers or other partners in the value chain is given.
Additional information:
Organizational boundaries define the operations and facilities included in the calculation inventory
for all companies within the Dalekovod Group, and the operational control approach is chosen.
Operational boundaries categorize emissions that directly or indirectly result from an
organization's operations and facilities, i.e. emissions from Scopes 1, 2 and 3, whereby for the
Dalekovod Group, which unites 7 companies, emissions for all three Scopes are separately
reported.
The calculation of Scope 2 emissions was made according to the location and market approach
and the emissions for 2023 and 2024 were shown. Emissions are expressed in terms of CO2
equivalent and shown by company and activity. To ensure consistency in monitoring emissions
over time, the data of this Inventory for 2024 for Scope 1 and 2 have been compared with the
2023 emissions calculation data consolidated for Dalekovod Group companies. Scope 3 emissions
are counted in this Inventory for 2024 for the first time, since the gap analysis conducted in 2023
showed that for this Inventory in 2024 the data necessary for the calculation by companies have
yet to be monitored and collected.
Comparison of the data of this Inventory from 2024 with the calculations of emissions from the
base year 2019. year at the level of the Group for those activities that were taken into account in
the calculation of emissions for 2019. It is noted that some of the data from 2019 were not
available (e.g. for fugitive and process emissions). The comparison of emissions was made for the
DALEKOVOD GROUP Group according to the location and market approach. An increase or
decrease in emissions in 2024 compared to the base year 2019 was reported, in order to monitor
the achievement of the goals from the Sustainability Strategy.
The document presents data on emission sources in overview tables for easier monitoring and
control. Data on Scope 1 and 2 activities by Scope 3 category activities for Dalekovod Group
companies are also presented
96
ESRS E5 Resource Use and Circular Economy
Dalekovod Group's environmental goals encourage a circular economy based on
sustainable practices around the use of resources and waste management – reducing or
recycling the generated waste, reducing the waste disposal rate and reducing the overall
environmental footprint of the product, i.e. more efficient use of resources in project
implementation and planning.
Regular training of employees on the circular economy, resource management and waste
We are aware that In order to progress and achieve our goals, we must actively involve
our employees and educate them on the basic concepts so that they also recognize
opportunities for advancement and contribute together to the achievement of our
environmental goals.
Description of the procedures for identifying and assessing significant
impacts, risks and opportunities related to resource use and the circular
economy
E5. IRO-1 E5. IRO-1_01 Dalekovod Group has conducted a comprehensive Impact, Risk and
Opportunity Assessment (IRA) through the dual materiality assessment process. An
overview of significant IRIs, where they are located in the value chain and the time
horizon, can be found in the following table:
Significant impacts,
risks, opportunities
Description of significant impacts,
risks, opportunities
Stage in
the value
chain
Time horizon
Inflow of resources
NEGATIVE
EFFECT -
REAL
Consumptio
n of carbon-
and
environmen
tally-
intensive
resources
during
product
production
Use of carbon- and environmentally-
intensive energy and materials, with the
exception of electricity which is renewable in
the Group. The extraction of metals and
minerals leads to environmental
degradation, depletion of raw materials and
reduces their long-term availability.
Although the Dalekovod Group has no
control over mining activities, it depends on
the availability of raw materials for its
operations.
UpstreamO
wn business
Short-term to
long-term
97
POSITIVE
EFFECT -
REAL
Introducing
recycled
materials in
strategic
products,
reducing
environmen
tal impact
Favoring
suppliers
that offer
sustainable
and
recyclable
materials
The Dalekovod Group designs products with
a very long lifespan and a high possibility of
renewal and revitalization. Additional efforts
are being made to introduce recycled and
materials with a reduced initial carbon
footprint of metals into the final products,
which reduces the need for extraction of
primary raw materials and reduces the
environmental footprint of the product itself.
Suppliers are checked on the application of
circular design principles and the use of
recycled materials, and care is taken to ensure
that packaging materials are from renewable
sources.
In order to use materials with a lower
environmental footprint when sourcing
materials and products such as concrete,
insulators, metal structures, suspension and
connection equipment, electrical and electronic
equipment, fuels, oils, paints and varnishes, we
look for information on the environmental
impact of materials and products throughout
the life cycle in supplier analysis
questionnaires. In Article 10. General Terms
and Conditions that are publicly published on
our website state the obligations of contractors
to submit information and declarations on
materials and products that are harmonized
with the legal regulations of the EU and the
Republic of Croatia in the field of use,
classification and use of chemicals (REACH),
prohibition of the use of certain harmful and
hazardous substances in electrical and
electronic equipment (RoHS), management of
hazardous waste and packaging waste.
Contractors are also obliged to familiarize
themselves with and act in accordance with the
Policies of the Quality, Environmental, Energy
and Health and Safety Management System of
the Dalekovod Group companies. With this
UpstreamO
wn business
Short-term to
long-term
98
business practice, we encourage the reduction
of the use of harmful and hazardous
substances in the supply chain, we influence
the reduction of the generation of hazardous
waste and the reduction of the amount of
waste that is disposed of in landfills in
accordance with the objectives of the Waste
Management Plan of the Republic of Croatia.
Resource drain
POSITIVE
EFFECT -
REAL
The
durability of
the product
and high
quality
enables the
reduction of
waste for
end users
and
resilience to
climate
risks
The high level of product quality brings a
longer service life and resistance. - The scale
will increase through further work on the
development of modular components that
are key to increasing the efficiency of
transport and installation and contribute to
easier dismantling and the end-of-life phase
of the equipment. This fully optimizes the
life cycle of the product, as the
Group strives to use materials and
components that are harmless to humans
and the environment, and that can be
recycled at the end of the life of the product
for which they are intended, or can be
disposed of harmlessly. In the future, he
expects an increased use of materials and
components with a low carbon footprint, the
use of components and materials with an
increased share of recycled content, and
thus an even stronger presence of the
circular economy.
UpstreamO
wn
businessDo
wnstream
Short-term to
long-term
Waste
NEGATIVE
EFFECT -
REAL
Generation
of waste
during
production
The Dalekovod Group produces significant
amounts of waste, most of which can be
recycled since it comes from a high-value
raw material in production.
Own
business
Short-term to
long-term
99
POSITIVE
EFFECT -
REAL
Efficient
manageme
nt of input
materials
and waste
The Dalekovod Group systematically
manages hazardous and non-hazardous
waste through ISO 14001 and about 90% of
waste is reused and/or recycled, which
significantly reduces the amount of waste
disposed of in landfills. Such waste is
disposed of through authorized legal
entities.
Efficient on-site management of incoming
materials and waste is based on the
principles of circular economy, with the aim
of optimizing processes and reducing waste.
By implementing an adequate waste
management plan generated during
production, the Dalekovod Group
contributes to its reduction and minimizes
negative impacts on people and the
environment.
Own
businessDo
wnstream
Short-term to
long-term
RISKS AND OPPORTUNITIES RELATED TO RESOURCE USE AND THE CIRCULAR ECONOMY
TRANSITIO
N RISK
Unstable
availability
and rising
prices of
raw
materials
and
materials
Increased demands for green technologies
and renewables are putting additional strain
on supply chains, which can lead to delays in
deliveries, reduced availability of key
intermediates and components, and rising
prices. These factors increase production
costs and financial risks, while at the same
time creating the need to diversify supply
chains and develop resilience strategies.
(related to E1 - climate change)
>Overview of transition risks DALEKOVOD
GROUP>UNIFIED
KATALOG_PONDERIRANI_10022025
【
Risk
code - 8
】
>
DALEKOVOD D.D. RISK MANAGEMENT REPORT
FOR 2024
【
Risk Rating - 7
】
UpstreamO
wn business
Short-term to
long-term
Policies related to resource use and the circular economy
E5-1 Dalekovod Group has published a sustainable business policy, which includes Circular
economy policy Through which Dalekovod Group recognizes the importance of the circular
economy in the sustainable management of resources, especially with regard to raw
materials. We are committed to promoting the principles of the circular economy through:
100
• Optimizing the use of materials: We strive to reduce the consumption of raw
materials through efficient product and process design.
• Recycling and reuse: We include recycled materials in our products wherever
possible and encourage the reuse of materials.
• Cooperation with suppliers: We work with our suppliers to ensure that the
raw materials used come from sustainable and renewable sources.
• Minimizing waste: We implement processes that reduce waste generation
during production and construction.
• Innovation in materials: We invest in the research and development of new
materials that are more environmentally friendly and sustainable.
• Education and awareness: We educate our employees and partners about
the importance of the circular economy and sustainable resource management.
• Monitoring and reporting: We regularly monitor our performance in the field
of circular economy and report on the results achieved.
Also, Dalekovod Group, through the ISO14001 established and adopted by the
Management Board of Dalekovod Group, implements the following:
- includes the nature of the organization, the scale and environmental impact of
its activities, products and services
- provides a framework for setting environmental objectives
- includes a commitment to environmental protection, including pollution
prevention and other specific commitments relevant to the organisation's
context
- includes a commitment to compliance obligations
- It includes a commitment to continuous improvement of the environmental
management system in order to increase the performance of environmental
management.
Measures and resources related to resource use and the circular economy
As part of the development of the sustainability strategy, the E5-2 Group Dalekovod has
set and completed the following goals through 2024:
ENSURE THE REDUCTION OF
WASTE GENERATION AND
THE EFFICIENT AND
RESPONSIBLE USE OF
RESOURCES IN PRODUCTION
•
Map the sources of waste generation in operations and develop an
action plan for reducing municipal waste
• Map the sources of strategic materials and the possibilities of
increasing the share of recycled materials
• Map with suppliers the source of wood and cardboard and
suppliers that can provide them from sustainable sources
• Conduct specialist training for key functions on circular economy,
resource management and waste
101
Municipal Waste Reduction Action Plan 2024
The aim of the action plan was to recover by recycling and preparing for reuse and repair
at least: 55% of the mass of municipal waste by 2025 through the following activities:
RB ACTIVITIES REALISATION
1
Reduce the generation of municipal waste by
providing additional containers in order to separate
waste into several fractions. 2 1000l plastic
containers in front of the warehouse
Realized 01/05/2024
4
Install paper boxes in all parts of the administration
building
Realized 15/06/2024
5
Install plastic containers in all parts of the
administration building (in the corridors)
Realized 16/06/2024
6
To create training for all key workers who have a
significant impact on waste management
yearly
5 Location monitoring related to waste management Quarterly
6 Analysis of data on the achievement of the goal 01/02/2025
The goal has been realized, more than 73% of waste from municipal waste has been
separated.
Targets related to resource use and the circular economy
E5-3 E5. MDR-T_14-19 Disclosures to be reported if the company has not implemented
targets related to resource use and the circular economy
Based on the knowledge gathered in 2024 in 2025, targets related to resource use and
the circular economy will be determined when developing an action plan for the
implementation of the strategy.
Inflow of resources
E5-4_06 Description of the methodologies used to calculate the data and the key
assumptions used
Dalekovod Group uses a number of resources in its business. Some of the data are listed
below, but we do not currently have data for some relevant parameters and we are
working on collecting data to meet the parameters until the next reporting period. It is
especially emphasized that individual companies within the Dalekovod Group regularly
monitor data on the total weight of products and technical and biological materials they
102
use. However, since they have not required suppliers to state the weight of delivered
products so far, Dalekovod Group currently has weight data for 63% of the total materials
purchased. For the remaining 37% of materials, accurate weight data cannot be calculated,
because the specified materials on delivery notes and invoices are expressed only in a unit
related to quantity, and not by weight, which makes it difficult to calculate the total
amount of resources used
Resource Inflow Data
ESRS Codes Inflow of resources
Amounts
(tons) /
Rates
E5-4_02
Total weight of technical and biological materials
used (tonnes)
122,363,459
Total weight of bio-based materials (and biofuels
used for non-energy purposes), originating from
sustainable sources (tonnes)
97,009
Goals have been set in order to manage resources and materials responsibly. We have
specifically set goals for paper and cardboard.
Resource drain
E5-5 E5-5_01 Description of key products and materials resulting from the company's
production process
The largest segment of the Group's revenue, up to 80%, is construction, while production
accounts for 16% and design for 3%.
E5-5_04 Within the complex sectors within which Dalekovod Group operates, various materials
are used, depending on the requirements of investors and customers. In the data
submitted during the delivery of materials, suppliers do not contain information on the
share of recyclable materials at the end of the life of the products supplied by Dalekovod
Group. In the course of 2025, a methodology will be established to estimate the share of
recyclable materials based on inputs and available databases.
E5-5_05 E5-5_06 Description of the methodologies used to calculate the data (resource outflows)
Information on waste generated from our own business:
ESRS
Codes
Quantities of waste disposed of/diverted
from disposal by type of
treatment/disposal
DANGEROUS
NON-
DANGEROUS
Amounts
(tonnes)
Amounts
(tonnes)
103
E5-5_08 WASTE DIVERTED FROM DISPOSAL 26.91 1,517.10
PREPARING FOR REUSE
0,00 0,00
RECYCLING
16.60 1,517.10
OTHER RECOVERY PROCEDURES
(including R1 incineration)
10.31 0,00
E5-5_09 WASTE TO BE DISPOSED OF 114.19 95.27
Burning
(D10 burning on land)
0.00 0.00
WASTE DISPOSAL
0.00 81.36
OTHER DISPOSAL PROCEDURES
114.19 13.91
E5-5_07
TOTAL WASTE GENERATED
141.09 1,612.37
E5-5_10
AMOUNT OF NON-RECYCLED WASTE
209.46
E5-5_11
PERCENTAGE OF NON-RECYCLED WASTE
3%
Quantities of waste type:
ESRS Codes Quantities of waste type
Amounts
(tonnes)
E5-5_07
Total waste generated
1,753,458
E5-5_15 Total hazardous waste generated
141,086
E5-5_16
Total radioactive waste generated
0
E5-5_17 Description of the methodologies used for the calculation of the data (waste
generated)
The amount of waste was obtained on the basis of the accompanying sheets that waste
collectors submit after collecting the waste at the locations of the Dalekovod Group. The
companies that generate waste are Dalekovod d.d., Dalekovod MK, Dalekovod Projekt,
Dalekovod OSO. Other companies of the Dalekovod Group generate only municipal waste,
for which collectors currently do not submit accompanying sheets with a pronounced
mass. During 2025, data on the mass of municipal waste will be available.
Information on social issues
ESRS S1 Own workforce
At Dalekovod Group, our employees and their safety and health come first. We
continue to invest and work to reduce risks to our workforce, which is why one of our
main strategic goals is to ensure a healthy and safe working environment for all
employees.
We pay special attention to the health and safety of our employees, encourage their
personal and professional development, and build a working environment that promotes
104
equal opportunities. We are actively working on increasing the employment of people with
disabilities, improving conditions for all parents, and aware of the importance of gender
equality, we plan to increase the representation of women in management positions. We
provide special support to foreign workers in integration and support our employees
working in international markets.
Employees also expect an improvement in working conditions and their labour rights, a
wider choice of opportunities for education and skills development, as well as greater
involvement and contribution to the development of the company, and greater flexibility.
It is important to emphasize that sustainability is often an important criterion for young
people in choosing an employer, but also a reason for terminating employment if the
employer does not meet the expectations in terms of sustainability. According to
Deloitte's 2023 survey, which included more than 22,000 respondents from Generation Z
and millennials in 44 countries, more than 50% of respondents research the
environmental impact of companies and their environmental policies before accepting a
job. In the social segment, young generations are increasingly sensitive to respect for
human rights, diversity and personal freedoms.
We have recognized the risk of a lack of quality labor on the market, which affects the
quality and successful implementation of the project. In our industry, projects are
demanding and legally strictly regulated. We work to actively monitor and remain
compliant with regulatory frameworks, legislation and the highest standards relevant to
our industry. We have the opportunity to attract a quality workforce as industry leaders
through clear communication of our progress towards achieving our sustainable goals.
It is not only important for Dalekovod to attract a quality workforce, which is the source of
our success, but we must also continuously invest in them. From onboarding to increased
hours of education and development plans, we invest in our employees to improve their
work experience and sense of belonging. Continuous improvement of knowledge and
skills and adaptation to the needs and goals of each employee are the basis of long-term
sustainability. Every employee contributes to the success of the company, and that is why
we have set up a stable and efficient system of recognizing, evaluating and rewarding the
best. The goal is for all employees, thanks to open and timely communication, to know the
direction of the company's business development, to have a clearly defined role, goals and
expectations in this development process. Without quality people, there are no successful
companies. We invest in developing the leadership skills of our managers so that they can
inspire and lead their teams towards common goals. We encourage cooperation and
105
sharing of knowledge and experience among employees. In cooperation with the
academic community, we actively encourage young people, reward excellence among
students, provide scholarships to third- and fourth-year students, and provide students
with the opportunity to do professional practice. In particular, we develop corporate
volunteering among our employees in order to jointly contribute to the well-being of local
communities.
Significant impacts, risks,
opportunities
Description of significant impacts,
risks, opportunities
Stage in
the value
chain
Time
horizon
WORKING CONDITIONS
POSITIVE
EFFECT -
REAL
Secure
workplaces
The prevalence of indefinite and full-time
contracts increases employee security.
Fluctuation is in line with the industry
average and does not pose a significant
problem for business stability.
Own
business
Short-term
to long-
term
POSITIVE
EFFECT -
REAL
Working time
Ensuring adequate working hours and rest
for workers, especially field workers,
reduces the risk of overwork, increases
safety and satisfaction, and contributes to
the sustainability of the workforce.
Own
business
Short-term
to long-
term
POSITIVE
EFFECT -
REAL
Adequate
salaries
Ensuring fair and competitive wages that
meet developments within the industry,
match workers' qualifications and
responsibilities and the scope of work. The
Dalekovod Group provides employees with
equal pay for equal work, based on the
gradation of job complexity and the
assessment of work performance. Internal
regulations provide a structure for
determining the basic salary, allowances
and variable parts, with additional benefits
such as work in special conditions (night
and shift work, work on Sundays and
holidays, and overtime) or bonuses related
to the company's business results.
Own
business
Short-term
to long-
term
106
POSITIVE
EFFECT -
REAL
Social dialogue
Freedom of
association, the
existence of
works councils
and workers'
rights to
information,
consultation
and
participation
Regular negotiations and exchange of
information between trade unions and
management ensure transparency, stability
and trust.
Dalekovod enables non-interference in the
establishment of trade unions and
membership, negotiations in good faith, and
provides space and time for workers'
representatives, as well as protection
against dismissal and non-discrimination of
trade union members.
Own
business
Short-term
to long-
term
POSITIVE
EFFECT -
REAL
Collective
bargaining
Almost all workers are covered by collective
agreements and have defined rights and
obligations, which ensures social stability
and clear rules in the organization.
Own
business
Short-term
to long-
term
NEGATIVE
EFFECT -
REAL
Work-life
balance
Insufficiently coordinated work schedules,
i.e. insufficiently efficiently organized shift
work and excessive working hours in
periods of increased production for some
employees, can affect satisfaction and lead
to stress and reduced productivity.
Own
business
Short-term
to long-
term
POSITIVE
EFFECT -
REAL
Work-life
balance
Measures such as providing conditions for
carefree use of parental leave and rest for
field workers contribute to maintaining a
work-life balance, reducing stress and
increasing employee satisfaction.
Own
business
Short-term
to long-
term
POSITIVE
EFFECT -
REAL
Employee
health and
safety
Systematic management of occupational
safety aspects through ISO 45001. Regular
monitoring and planning of occupational
safety, education, and active work of formal
occupational safety committees contribute
to safety and risk reduction for employees.
A comprehensive management system and
the application of measures have a broad
and lasting impact on the Dalekovod Group,
where the nature of the work is often
dangerous, especially for field workers.
Own
business
Short-term
to long-
term
EQUAL TREATMENT AND OPPORTUNITIES FOR ALL
POSITIVE
EFFECT -
REAL
Gender equality
and equal pay
Men and women are paid equally for equal
work, and the system is fully aligned with
the principles of non-discrimination and
Own
business
Short-term
to long-
term
107
for work of
equal value
gender equality. In the long run, it provides
added value to the reputation and trust of
employees.
POSITIVE
EFFECT -
REAL
Training and
skills
development
Continuous training and development of
employees at all levels and the creation of
opportunities for advancement enables
employees to acquire new skills and
knowledge, which ensures the delivery of
quality products and increases their
competitiveness in the labor market.
Through a continuous program of internal
and external education, the Dalekovod
Group annually covers two-thirds of its
employees at all levels, from production
and assembly to the development of
competencies for managerial staff.
Own
business
Short-term
to long-
term
POSITIVE
EFFECT -
REAL
Employment
and inclusion of
persons with
disabilities
Dalekovod employs 15 people with
disabilities, with adapted working
conditions and support, enabling them
equal participation and inclusion. Due to
field work and difficult physical work,
greater employment of persons with
disabilities is not feasible, but the Group is
actively working on the integration and
maintenance of their employability.
Own
business
Short-term
to long-
term
POSITIVE
EFFECT -
REAL
Measures
against violence
and harassment
in the
workplace
The implementation of a strict zero-
tolerance policy on violence and
harassment and the existence of
confidential channels for whistleblowing
and whistleblower protection ensure a safe
working environment, thereby increasing
trust among employees and creating a
working environment where human rights
and ethical standards are valued. Dalekovod
has introduced measures to prevent
violence and harassment through collective
agreements, internal policies and employee
training.
(related to G1-Business Conduct)
Own
business
Short-term
to long-
term
POSITIVE
EFFECT -
REAL
Variety
Developing an inclusive work environment
that respects the diversity of all employees,
Own
business
Short-term
to long-
term
108
including foreign workers, integration and
support.
POSITIVE
EFFECT -
REAL
Suitable
accommodation
Decent accommodation is provided for
workers residing outside the workplace,
thereby reducing employee stress,
increasing productivity and contributing to
worker satisfaction. Quality
accommodation significantly contributes to
the satisfaction and motivation of
employees for field work.
Own
business
Short-term
to long-
term
POSITIVE
EFFECT -
REAL
Privacy
Implementation of clear personal data
protection policies, compliance with legal
frameworks (GDPR) and ensuring
transparency and data security in selection
and business processes. A key contributor
to candidate and employee trust and
regulatory compliance.
Own
business
Short-term
to long-
term
RISKS AND OPPORTUNITIES ASSOCIATED WITH ONE'S OWN WORKFORCE
RISK
Fluctuation and
unavailability of
the workforce
Risk of departure of key employees,
inability to find and attract quality
replacements in the labor market due to the
outflow of labor to countries with better
conditions and the unavailability of
replacements with the necessary
competencies.>REPORT ON RISK
MANAGEMENT DALEKOVOD D.D. FOR
2024【Risk Label - 3】>
UNIFIED KATALOG_10022025 【DLKV】】
Own
business
Short-term
to long-
term
RISK
Impaired health
and safety of
employees
Insufficient level of safety in working
conditions and an increase in accidents
related to work processes in some sectors.
The risk of possible injuries at work with
regard to the type of activity and
continuously present sources of danger,
such as the risk of serious and even fatal
injuries due to the risk of construction of
energy facilities (work near high voltage and
work at height).>RISK MANAGEMENT
REPORT DALEKOVOD D.D. FOR 2024【Risk
Label - 2】>
UNIFIED KATALOG_10022025 【DLKV】】
Own
business
Short-term
to long-
term
109
Significant impacts, risks and opportunities and their interaction with the
strategy and business model
S1. SBM-3 S1. SBM-3_01 All people in their own workforce who may be materially affected by the
business are included in the scope of the ESRS 2 disclosure
When reviewing operations and the effects, risks and opportunities associated with its
own workforce, all persons in the Dalekovod Group's own workforce who could be
materially affected by the Group's operations are included. This includes employees
directly employed by Dalekovod Group, but also the safety of external associates and
contractors working in the Group's facilities.
S1. SBM-3_02 Description of the types of employees and persons not employed in
their own workforce who are subject to material influences
Significant effects partly relate to employees who are not employed, who may be persons
who have signed contracts for the performance of works, i.e. self-employed persons or
persons provided by companies primarily engaged in "employment activities", whose
work is managed and operated under the leadership of certain companies of the
Dalekovod Group.
S1. SBM-3_06 Description of significant effects on workers that may arise from
transition plans to reduce the negative impacts of on the environment and achieving
greener and climate-neutral operations
Negative effects
Negative effects on one's own workforce are insufficiently coordinated work schedules,
shift work and excessive working hours in periods with multiple projects that affect
satisfaction, productivity and relationships with one's own workforce.
Positive effects
In our own workforce, although there are negative effects, there are more positive ones.
For the most part, we have indefinite contracts and provide security and adequate wages
that are competitive and in line with the industry. Dalekovod enables non-interference in
the establishment of trade unions and membership, negotiations in good faith, and
provides space and time for workers' representatives. It is important to emphasize that all
workers are covered by collective agreements and have clearly defined rights and
obligations.
Risks
110
Risks in the workforce are difficult implementation of projects and processes due to
limited human potential, the departure of key employees and the lack of a competent
workforce on the market, which affects the development and realization of goals in
Dalekovod. In today's market, there is insufficient availability of quality workforce with the
necessary competencies.
S1. SBM-3_07 Information on Types of Operations with a Significant Risk of Forced or
Compulsory Labor Incidents
S1. SBM-3_08 Information on Countries or Geographic Areas with Operations
Considered to Be at Significant Risk of Forced or Compulsory Labor Incidents
S1. SBM-3_09 Information on Types of Operations with a Significant Risk of Child
Labor Incidents
S1. SBM-3_10 Information on Countries or Geographic Areas with Operations
Considered to Be a Significant Risk of Child Labor Incidents
As part of the management of risks related to forced or compulsory labour and child
labour, an assessment of the countries and geographical areas in which we operate or
from which we source goods and services that have been identified as potentially risky is
regularly carried out. This assessment is based on relevant international reports,
monitoring media sources, and consulting specialized databases and available guidelines
from international human rights organizations.
As part of the due diligence process in accordance with the requirements of the UNGP and
OECD and the MSS from the EU Taxonomy, Dalekovod Group has gone through the entire
value chain of the impact on the protection of human rights and child labour, competition,
anti-corruption and tax policies, and established a risk control system in these areas.
No incidents related to forced or compulsory labour or child labour were recorded in the
reporting period in the countries or territories in which we operate or from which we
source materials and services. We continue to systematically monitor the situation, in
order to act preventively and to identify and mitigate possible risks related to these areas
in a timely manner.
S1. SBM-3_11 Disclosure of whether and how an understanding has been developed
that people in their own workforce with certain characteristics, who work in certain
contexts or perform certain activities, are at higher risk of harm
Workers in specific production and field conditions require enhanced safety protection and
regular education. These risks are characteristic of such working conditions and are
111
recorded within the ISO 45001:2018 management system for occupational health and
safety management.
S1. SBM-3_12 Disclosure of Significant Risks and Opportunities Arising from the
Effects and Dependence on People in Your Own Workforce Relate to Specific Groups of
People
Dalekovod Group recognizes that employees in production facilities have an increased risk
of safety incidents. Certain production facilities have been identified as having a higher
level of risk due to the nature of the work, which involves working with specialized
equipment, machinery and tools, and complex work processes that require special
attention and expertise. In addition, employees working in the field on assembly jobs are
exposed to specific risks due to changing working conditions, working at heights, handling
heavy loads and the use of various tools and machines in different working conditions.
The Group continuously invests in employee education, the application of the highest
standards of occupational safety, and the supervision and evaluation of safety procedures
in order to reduce risks and improve working conditions for all employees.
Policies related to own workforce
S1. MDR-P_01-06 Policies for the Management of Significant Impacts, Risks and
Opportunities Related to Own Workforce
Human rights
S1-1 To protect our workers and provide them with a safe workplace, to ensure health and
good working conditions adoption Safe Workplaces and Employees Policy. The policy
encourages the achievement of work-life balance, skills development, and encourages
associations and support for social dialogue between workers and management,
transparency, and participation in decision-making.
Also, the policy ensures competitive wages in accordance with standards and key human
rights and workers' rights that respect employees' working hours, protect their privacy,
promote gender equality and diversity, prevent discrimination and implement measures
against violence and harassment in the workplace. Workers' welfare policy.
S1-1_07 From In 2007 Dalekovod is a signatory to the UN Global Compact, which obliges it to
operate in accordance with the Ten Principles, which include responsibilities in the areas
of human rights, labour, the environment and the fight against corruption. These
principles are based on internationally accepted UN declarations and conventions.
Security
The health and safety policy applies a health and safety management system according to
the international standard ISO45001:2008. Health and safety protection in the companies
112
Dalekovod d.d., Dalekovod MK and Dalekovod OSO, is managed according to the
introduced and certified system in accordance with the ISO 45001:2018 standard, and the
certificate is valid until December 1, 2025. Dalekovod Projekt is certified separately
according to the occupational health and safety system and the certificate is valid until
December 15, 2025. All certifications and policies are published on our website. The
system policy shall contain objectives relating to continuous improvements in health and
safety, depending on identified and planned risks. The system manages the risks to which
the employees of the Dalekovod Group and other interested parties are exposed, as well
as the continuous improvement of the security of all business processes. At the same
time, all processes are planned, prepared and organized in accordance with the applicable
laws and regulations in the field of safety and health protection applicable to the
Dalekovod Group. Through 2024 Dalekovod d.d. carried out preparatory activities in terms
of analyses, assessments of the situation in the field of occupational safety and, in
accordance with the evaluated data, started planning a year-long campaign on safety and
health at work for all employees of the Dalekovod Group through 2025. implements the
"Safety Culture" campaign, which sets rules for workers in the workplace.
Opportunities for improvement
In 2024 a total of 67 improvement measures were adopted:
- 13 measures for Boards of Affiliates
- 28 based on the assessment of the Management Board,
- 8 internal judgments
- 10 opportunities for improvement and
- 8 Risk Assessment
Diversity, equity and inclusion
One of the strategic goals of the Dalekovod Group is to promote inclusion, diversity and
equal opportunities. The management and our managers recognize the importance of
these principles, which we strive to integrate into all business processes, By acting
together, we promote a corporate culture that empowers our employees, clients and all
those individuals and groups who are yet to become part of our business culture and
tradition.
After an in-depth recording of the impact of human rights in accordance with the CSRD
Directive, the goal was identified to adopt a Diversity Policy at the level of the Dalekovod
Group, which will then be transferred to the operations of the Dalekovod Group, and
refers to inclusion and equal opportunities as well as an action plan that will define the
necessary measures for implementation. The purpose of the Policy is to ensure the
113
creation of a working environment based on misery, tolerance and respect for individual
rights, and to improve the working conditions of all workers through support and
initiatives. Strengthening the whistleblowing mechanism and educating employees on
ethics and rulings will be a priority to encourage open communication and active respect
for rights.
In 2024 there were a total of 6 women and 59 men in management positions in the
companies of the Dalekovod Group, i.e. Women held 9 percent of management positions
out of a total of 65. The management level includes high, middle and lower management.
Senior management does not include members of the Management Board, and the
composition of the Management Board is presented in Chapter GOV-1 Corporate
Governance. The ratio of the basic salary of men to women is identical in all categories of
workers – management and operational level and within the operational level
engineering-production and administrative positions.
Dalekovod and Dalekovod OSO employ 4 men with disabilities at management levels, who
are considered a vulnerable group according to the Consolidated GRI Standards of 2021. A
total of 16 workers with disabilities were employed in the companies of the Dalekovod
Group.
Procedures for cooperating with own workers and workers' representatives
on impacts
S1-2 At Dalekovod Group, the team is at the center of all projects and decisions. Teamwork and
spirit is part of the corporate culture where we actively promote open communication.
Dalekovod Group fosters a system of formal cooperation with employees through Works
Councils and trade union representatives. The employer's relations with workers'
representatives are defined by the Collective Agreement of the Dalekovod Group, which
prescribes mutual obligations, including regular information on issues important to
employees. This ensures that social dialogue is embedded in the management of the
company.
S1-2_01 Publish whether and how the perspectives of their own workforce inform
decisions or activities aimed at managing actual and potential impacts
Dalekovod d.d. has established, implements and maintains processes for the consultation
and participation of workers at all applicable levels and functions in planning,
implementation, performance evaluation and actions to improve the occupational health
and safety management system (SUZIS). Management system policies are transferred to
all employees as the basic tool of the Management Board in securing and managing
systems. The identified and assessed risks and opportunities are also related to changes
114
in the organization of each contracted project. This requirement of the standard is covered
in detail in the Rules of Procedure of the Management System.
S1-2_02 Cooperation takes place with our own workforce or their representatives
Workers are involved in decision-making through mandatory consultation of management
with their representatives. The employer must consult the Works Council before making
any decision important for the economic and social position of the worker. The Works
Council also informs the trade union of such intended decisions, which ensures two-way
communication. In addition, the workers have their own representative in the Supervisory
Board of the Dalekovod Group, which gives them a voice in the highest management body
of the company. Through this workers' representative at the level of the Supervisory
Board, as well as through consultations with the Works Council, employee perspectives
are integrated into decision-making processes.
The Human Resources Sector also conducts an annual employee satisfaction survey on
the basis of which it evaluates, implements, improves and proposes new measures to
achieve long-term employee satisfaction. Special emphasis was placed on the education
and training of workers, during which they were provided with a significant selection of
different educations for the acquisition of knowledge and skills. For example, education of
new computer programs, presentation skills, stress management workshops, ESG
education and a whole range of professional training where workers can choose or are
suggested by their superiors to attend the mentioned courses. Dalekovod Group places
significant emphasis on competitive knowledge and skills that further shape products and
services for business in the global market.
S1-2_03 Announcements of the stage in which the cooperation takes place, the type of
cooperation and the frequency of cooperation
Dalekovod Group applies several channels of regular cooperation with employees, at
different intervals:
• Quarterly information – The Management Board reports to the Works Council at
least every three months on the status and results of business, work organization
and other important issues for employees.
• Semi-annual Workers' Assemblies – Twice a year, meetings of all workers are
organized for comprehensive information and discussion on the state of business.
At these meetings, the management presents key information, and workers have
the opportunity to ask questions and discuss.
• Constant communication – Through internal communication channels (intranet and
internal services, e-mail, internal), employees continuously receive important
115
information about the company. These channels also allow workers to make their
suggestions or comments throughout the year.
In addition to the above, the Collective Agreement also regulates the process of collective
bargaining with trade unions, which is another form of formal cooperation that is carried
out as needed (e.g. when renewing a contract).
S1-2_04 Disclosure of the function and top position within the company that has
operational responsibility for ensuring that collaboration occurs and that the results
inform the company's approach
Formal cooperation with workers is ensured by both the workers' representative bodies and the
employer's responsible persons. The highest body that includes workers' representation is the
Supervisory Board, in which a workers' representative takes a seat, ensuring that the voice of
workers is heard at the highest level of management. Members of the management board and HR
functions are in charge of the operational implementation of cooperation, in accordance with the
provisions of the Collective Agreement. The collective agreement of the Dalekovod Group clearly
defines the roles of the employer (management) and workers' representatives in regular
information and consultations, thus integrating the responsibility for social dialogue into the
company's management system.
S1-2_06 Publication of how the effectiveness of cooperation with one's own workforce
is assessed
Dalekovod Group monitors the effectiveness of cooperation with workers through
constant dialogue and feedback. Workers' meetings, which are held twice a year, serve
not only to inform but also to discuss – workers have the opportunity to openly ask
questions and comment on the business, which allows the management to directly
assess the mood and address possible problems. Through the Works Council and the
union, employees continuously voice their proposals or concerns, and the fact that
collective bargaining takes place regularly and without industrial action is an indicator of
constructive cooperation. For example, at the end of 2024 a new collective agreement
was concluded, which brought an increase in the material rights of workers – which
testifies to the successful social dialogue and the company's ability to take into account
the needs of employees. Through regular analyses of personnel indicators (such as
fluctuation, sick leave, complaints) and occasional satisfaction surveys, the company
additionally monitors the state of employment relations. At the level of the Dalekovod
Group, a satisfaction survey is conducted annually, which includes all companies of the
Dalekovod Group.
All employees are regularly informed via email in the form of a newsletter (via
glasnogovornik@dalekovod.hr), bulletin boards and the internal Jenz application that they
116
install on their mobile phone. The network is closed only to employees and allows
interactivity, commenting and through the "Shoutbox" channel it is possible to submit
questions or complaints (with the possibility of anonymous reporting).
S1-2_07 Publication of steps taken to gain insight into the perspectives of people in
their own workforce who may be particularly vulnerable to impacts and/or
marginalized
The Dalekovod Group pays special attention to ensuring equality, diversity and
inclusiveness among all employees, recognizing the importance of creating a working
environment in which everyone can fully realize their potential. The company has clearly
defined its social sustainability goals, with a special emphasis on increasing the
representation of women in leadership and highly professional positions and on
encouraging the employment of people with disabilities with the continuous development
of an inclusive work environment.
Such goals are set through continuous monitoring of the position of these groups. Internal
communication initiatives also aim to raise awareness of the specific needs of vulnerable
groups. Through the Works Council and other channels, all employees, including members
of more sensitive categories, have the opportunity to present their perspectives, which
the management strives to take into account when making decisions and creating
initiatives for the well-being of employees.
Procedures for remedying adverse impacts and channels through which own
workers can raise concerns
S1-3 Formal communication has been established with all stakeholders, internal and external,
that their opinion and our relationship with them is important for the efficient operation of
Dalekovod. Formal means for communicating concern and for reporting irregularities exist
and are defined Ordinance on the Procedure for Internal Reporting of Irregularities and the
Appointment of a Confidential Person. Effects are managed in accordance with the policy. In
addition, regular workshops with leaders were held, and this year workshops with
employees began.
Dalekovod Group encourages a culture of open communication and provides protection to
whistleblowers who report irregularities or violations of our policies and laws in good
faith. We ensure confidentiality and take all necessary measures to protect ourselves
from retaliation.
117
S1-3_01 Disclosure of general approach and process for providing or contributing to a
remedy when an enterprise has caused or contributed to a significant adverse impact
on people in its own workforce
Dalekovod Group has a clearly defined general approach and formalized processes for remediation
of negative effects on its own workforce. In the event of a negative impact, such as violation of
labor rights, discrimination or security incidents, Dalekovod Group applies internal procedures in
accordance with the laws of the Republic of Croatia, including the Act on the Protection of
Whistleblowers and the Labor Act. Particularly important is the role of the confidential person for
receiving reports of irregularities, who is appointed with the active participation of employees and
has the obligation to investigate the report and initiate the resolution procedure. Although no
formal cases of discrimination or serious violations of rights were recorded in the previous period,
Dalekovod Group regularly evaluates the effectiveness of remediation through internal audits and
monitoring of possible repeated complaints, thus demonstrating a systematic and preventive
approach to the protection of workers' rights.
The procedure includes:
• Incident log.
• Investigating and determining the cause of the incident.
• Taking corrective actions and prevention measures.
• Monitoring the effectiveness of the measures taken through periodic audits and internal
controls.
The Dalekovod Group assesses the effectiveness of remediation through regular inspections and
monitoring of the frequency of repeated complaints and incidents, and applies corrective
measures based on the results of these assessments.
S1-3_02 Disclosure of specific channels established for own workforce to raise
concerns or needs directly with the company and to address them
Dalekovod Group has several specific channels through which employees can directly
communicate their concerns or needs:
• Irregularity Reporting Channel - A confidential person for receiving anonymous or non-
anonymous reports of irregularities.
• Works Council and Trade Unions – available to all employees for direct communication with
the Management.
• Human Resources (HR) – a centralized channel for resolving individual questions and
complaints.
• Internal platform (Jenz application) – a digital channel for anonymous and non-anonymous
communication between employees and management.
• Reports of violation of the dignity of workers – a formal channel harmonized with the
Labor Act.
These channels, especially the Jenz application and mail glasnogovornik@dalekovod.hr, are part
of the on-boarding process of introducing newly hired employees to the forms and ways of
118
communication within the company. All channels are continuously promoted among employees
through internal communication campaigns, trainings and regular meetings with workers'
representatives, whereby the Dalekovod Group actively supports the availability of channels for
expressing concerns.
S1-3_05 Mechanisms for resolving complaints or grievances related to employee
issues exist
Within the Dalekovod Group, there are clearly defined mechanisms for resolving
complaints or complaints from employees that cover issues such as occupational safety,
discrimination, harassment or unethical behavior. The mechanisms for resolving
complaints or complaints related to employee issues are regulated by the general acts of
the Company (Rules of Procedure, Rules of Procedure and Measures for the Protection of
Dignity and Protection against Discrimination, and Rules of Procedure for Internal Reporting of
Irregularities).
The confidential person for reporting irregularities is obliged to investigate and initiate
proceedings within seven days of receiving the report, and the final decision is given
within 30 days (maximum 90 days for complex cases). In addition to the formal
whistleblowing channel, HR departments, executives, and labor representatives also have
a role to play in processing employee complaints, ensuring a quick response and
systematic resolution of issues.
S1-3_06 Disclosure of the processes through which the enterprise supports or
requires the availability of channels
The processes themselves that ensure the availability of channels regulated by the general acts of
the Company that are public and available to all workers. Channel availability support is achieved
through the following activities:
• Regular education of employees about their rights and procedures (e.g. at introductory
trainings, workshops, meetings).
• Regular communication via internal channels, intranet and internal application (Jenz).
• Periodic organization of workers' meetings and meetings with representatives of the works
council and trade unions.
S1-3_07 Announcements on how issues raised and addressed are monitored and
monitored and how channel effectiveness is ensured
The effectiveness of the channel is ensured through appointed persons for a particular
process who are independent in their work and through appropriate control by authorized
119
bodies. Dalekovod Group conducts systematic monitoring and supervision of the
efficiency of the channel:
• The confidential person shall keep detailed records of all reports, including the
outcomes of the proceedings.
• Internal committees and HR departments regularly analyze trends in complaints
and check the effectiveness of the measures taken.
• Periodic evaluations of the system through annual audits and reports.
• Transparent reporting on the number of complaints and their resolution in annual
reports.
This approach ensures continuous improvement of channels and processes.
S1-3_08 Disclosure of whether and how it is assessed that one's own workforce is
aware of and trusts structures or processes as a way to voice their concerns or needs
and have them addressed
Dalekovod Group assesses employee awareness and trust in channels for expressing
concerns through regular surveys on employee satisfaction, as well as an analysis of the
use of individual channels. The results of surveys and analyses are used to further
improve communication channels, including additional education and communication
campaigns.
S1-3_09 Policies relating to protection against retaliation for individuals who use
channels to raise concerns or needs are in place
Dalekovod Group has established internal policies, regulations and general acts of the Company
that clearly prescribe the prohibition of placing the applicant in an unequal position in any form
due to the submission of the application. Any form of retaliation or negative consequences against
employees who raise complaints or concerns is expressly prohibited. The Ordinance on Reporting
Irregularities is harmonized with the EU Directive and national laws on the protection of
whistleblowers. In the event of a report, Dalekovod Group guarantees the confidentiality of the
whistleblower's identity and provides legal protection, which further encourages employees to
openly express their concerns without fear of negative consequences.
Protection against retaliation is clearly stated in the internal documentation of the Dalekovod
Group and is communicated to all employees through an internal platform, training and internal
campaigns.
With this approach, Dalekovod Group ensures an open and safe working atmosphere, encouraging
employees to freely raise concerns without fear of negative consequences.
120
Taking measures for significant impacts on one's own workforce, approaches
to mitigating significant risks and materialising opportunities related to one's
own workforce, and the effectiveness of these measures
S1-4 S1. MDR-A_01-12 Action plans and resources to manage significant impacts, risks
and opportunities related to your own workforce
S1-4_01 Description of the measures taken, planned or ongoing to prevent or
mitigate adverse effects on one's own workforce
Dalekovod Group carries out continuous activities to prevent and mitigate the negative
effects of:
• Salaries and material security: A new Collective Agreement was adopted in 2024
which increases the lowest wage bases and allows for additional non-taxable
bonuses. The goal is to reduce the financial stress of employees and adjust salaries
to the rise in the cost of living.
• Time management: Optimizing work schedules and improving the organization of
shift work to prevent excessive working hours and maintain productivity and
employee satisfaction.
• Safety at work: Systematic implementation of the ISO 45001 system, with
continuous education, regular audits and activities of formal Occupational Safety
and Health Committees, especially in sectors with an increased risk of injury.
Dalekovod Group defines quantitative goals related to health and safety, such as the
goal of maintaining lost working hours due to injuries below 1 percent by 2026.
• Stress prevention and mental health: Trainings and activities launched to prevent
stress and raise awareness of the importance of employees' mental health during
2024
S1-4_02 Disclosure of whether and how action has been taken to provide or enable a
remedy in relation to actual significant effect
Dalekovod Group has formal remediation procedures in place in the event of significant
impacts such as occupational injuries or discrimination, including:
• Formal procedures for receiving and handling complaints through a confidential
whistleblower reporting person.
121
• Remedial measures such as corrective actions, legal support to employees,
compensation for damages and adaptation of workplaces after incidents have been
identified.
• Continuous monitoring of the effectiveness of measures through internal
monitoring.
S1-4_03 Description of additional initiatives or measures with the primary purpose of
providing positive effects for their own workforce
S1-4_04 Description of how the effectiveness of measures and initiatives in delivering
results for own workforce is monitored and assessed
Dalekovod Group monitors and evaluates the effectiveness of the activities undertaken
through:
• Internal employee satisfaction surveys and regular surveys on the organizational
climate.
• Periodic revisions of the ISO health and safety system.
• Analyses of employee turnover and monitoring the number and nature of reported
complaints.
• Evaluating the impact of training and mentoring programs through employee
feedback and measurable progress indicators.
S1-4_05 A description of the process through which it is identified which measure
is necessary and appropriate in response to a particular actual or potential adverse
impact on one's own workforce
The identification of measures is based on regular risk analyses where appropriate (such
as occupational safety risks under ISO 45001), consultations with works councils and
trade unions, and on the basis of complaints or feedback from employees. Also,
Dalekovod Group systematically analyses market trends and internal indicators (such as
fluctuation, sick leave, working hours) in order to preemptively identify the need for
additional measures.
S1-4_06 Description of what measures are planned or ongoing to mitigate significant
risks arising from the effects and dependencies on one's own workforce and how the
effectiveness is monitored
122
Key measures to mitigate significant risks include:
• Turnover and availability of workforce: Development of employer branding
initiatives, increase of scholarships for pupils and students, introduction of a system
of recommending new employees.
• Health and safety: Continuous education, regular audits and strengthening of the
safety culture through the active participation of employees in occupational safety
committees.
• Trust in complaint channels: Continuous improvement of confidential channels,
regular communication on the rights and protection of whistleblowers, transparency
of procedures and protection of whistleblowers from retaliation.
The effectiveness of these measures is monitored through systematic monitoring of
internal indicators and regular internal audits.
S1-4_07 Description of what actions are planned or ongoing to realize significant
opportunities related to their own workforce
Dalekovod Group is implementing actions to realize opportunities such as:
• Professional Development: Performance Management System, Individual
Development Plans, and Mentoring Program.
• Inclusiveness and diversity: Integration of foreign workers and inclusion activities
for persons with disabilities.
• Development of digital competences: Planned minimum share of 20% of trainings
focused on employees' digital skills.
S1-4_08 Disclosure of whether and how it is ensured that own practices do not cause
or contribute to significant adverse impacts on one's own workforce
Dalekovod Group implements preventive measures to ensure that its own practices do
not contribute to negative effects on employees:
• Regular audits and supervision of business processes and working conditions.
• Transparent employment and personal data processing policy (GDPR compliance).
• Open communication with workers and trade unions in the event of tension
between business needs and employee interests.
123
S1-4_09 Announcement that resources have been allocated to manage significant
impacts
Dalekovod Group clearly allocates resources to manage significant effects on employees
through:
• Appointment of a confidential whistleblower and appropriate internal committees.
• A dedicated human resources department that coordinates activities related to
performance management, training and employee development.
• Financial investments in education, safety and health systems, development of
digital competences and inclusive initiatives.
• Action plans and clear deadlines for the implementation of measures and activities
within the strategic goals have been developed.
With this detailed approach, Dalekovod Group confirms its commitment to effectively
manage significant impacts on its own workforce, actively addressing the identified risks
and opportunities
Targets related to the management of significant adverse impacts, the
incentivising of positive impacts and the management of significant risks and
opportunities
S1-5 S1. MDR-T_01-13 Objectives set to manage significant impacts, risks and
opportunities related to your own workforce
SOCIAL GOALS
ENSURE A HEALTHY
AND SAFE WORKING
ENVIRONMENT FOR ALL
EMPLOYEES AND
ASSOCIATES
•
Continuation of the implementation of occupational health and safety training and
keeping precise records
• To carry out a micro-
communication campaign on occupational safety and health
awareness for particularly exposed groups
•
Conduct a survey among employees to identify topics on the basis of which an
educational plan for stress prevention and promotion of the importance of mental
health will be developed (in May during the European Mental Health Week) and
consequently design an online training
PROMOTING INCLUSION,
DIVERSITY AND EQUAL
OPPORTUNITIES
•
Coordinate with the KONČAR Group on the timeframe for the adoption of the
diversity, inclusiveness and equal opportunities policy, and accordingly initiate the
development of the Action Plan
124
•
Conduct an initial survey of diversity, inclusiveness and equal opportunities in the
organization in order to identify priority areas (to be coordinated with the KONČAR
Group)
• Conduct an in-
depth human rights recording process with an emphasis on
children's rights in accordance with the requirements of the CSRD Directive (by the
end of 2024)
• Make a calculation of the pay gap M/F
•
Start developing a women's promotion program for managerial/engineering/highly
skilled positions
•
Introduce special measures in the onboarding program to facilitate the integration
of foreign workers
•
To examine the satisfaction of employees who use support measures when
returning from parental leave
ENABLE EMPLOYEES TO
DEVELOP AND GROW
PROFESSIONALLY
•
In 2024 conduct the first survey of satisfaction with the onboarding process and
the challenges of the first month, and consequently develop process improvements
• In 2024
include satisfaction with personal and professional development education
in the internal satisfaction survey
• Examine the needs and interest in the introduction of "green" skills
•
Start the process of identifying employees who are potential successors in key
managerial positions, with a special focus on women
TO BRING KONČAR
CLOSER TO YOUNG
PEOPLE AND DEVELOP
THE REPUTATION OF
KONČAR AS A
DESIRABLE EMPLOYER
•
In the Ordinance on the Award of Scholarships, scholarships for female students
should be specifically included
•
The same Ordinance will provide for the participation of scholarship holders in the
activities of Dalekovod
•
Develop internal guidelines for the protection of young workers and student
workers (internships)
•
To examine the needs of young people participating in pupils' and students'
internships
S1-5_01 Disclosure of whether and how own workforce or workforce
representatives were directly involved in setting goals
Dalekovod Group actively involves its workforce and their representatives in the process
of defining goals related to the management of significant negative and positive impacts
and risks and opportunities related to the workforce:
• Works councils and trade unions are directly involved in setting goals through
regular meetings, consultations and collective bargaining, especially related to
working conditions, wages, safety at work and other employment conditions.
• Through formal social dialogue and collective agreements, workers'
representatives play an active role in defining goals such as minimum wages,
additional benefits, work-life balance and anti-harassment measures.
125
• Occupational health and safety committees, which include workers'
commissioners, regularly identify and approve goals to improve health and safety,
such as occupational injury reduction targets.
In addition, employees are involved in the process of collecting data and assessing the
materiality of topics when developing the current Sustainability Strategy and
implementing double materiality.
S1-5_02 Disclosure of whether and how own workforce or workforce
representatives were directly involved in monitoring performance against targets
Dalekovod Group ensures the direct involvement of the workforce in monitoring the
achievement of the defined goals:
• Regular information of the Works Council, which takes place at least quarterly,
ensures that workers have a transparent insight into the progress of business goals,
including those related to working conditions, employment and health and safety
protection.
• A representative of employees in the Supervisory Board enables direct monitoring
of the achievement of the company's strategic goals at the highest level.
• The OSH Committees continuously monitor the implementation of health and
safety objectives and provide feedback on the effectiveness of the measures,
carrying out periodic evaluations and reviews of existing practices.
S1-5_03 Disclosure of whether and how own workforce or workforce
representatives were directly involved in identifying lessons or improvements as a
result of the company's performance
The Dalekovod workforce or their representatives are actively involved in identifying
lessons and initiatives to improve:
• Through continuous social dialogue, works councils and trade unions analyse
experiences from the previous period and define improvements for future initiatives.
• Occupational safety committees actively participate in the analysis of incidents,
after which preventive measures and education are jointly defined.
• Dalekovod regularly conducts surveys among employees, and based on the results
obtained, a number of improvements are introduced, such as educational initiatives,
mentoring, digital competencies and more flexible forms of work.
126
• Workers' representatives also participate in committees for the resolution of
complaints (e.g. for the protection of the dignity of workers), which ensures the
continuous improvement of the organisational culture and the prevention of
negative phenomena.
Characteristics of the company's employees
S1-6 Table 2 Number of employees by gender
Gender Number of employees
Men 934
Women 134
Secondly* 0
Not reported 0
TOTAL 1.068
ESRS code: S1-6_01
Table 3 Representation of the number of employees in countries where at least 50
employees represent at least 10% of the total number of employees of the company
ESRS code Earth Number of employees
Croatia 1,056
S1-6_04 TOTAL 1,056
The Table shows the total number of employees of the company for 2024. All 1,056
employees are in Croatia. In addition to Croatia, Dalekovod employs 9 people in Bosnia
and Herzegovina and 3 in Slovenia, but given the small share of employees who are below
50 and below 10% of the total number of employees, these data are outside the scope of
this table.
Table 4 Employees by contract type (reporting on full-time and part-time employees is
voluntary)
Women
Men
Secondly*
Not published
Total
Number of employees (number/FTE)
134
934 0 0 1,068
Number of full-time employees (number/FTE)
133 854 0 0 987
Number of temporary employees (number/FTE)
127
1
80
0
0
81
Number of employees with unguaranteed working hours (number/FTE)
0 0 0 0 0
Number of full-time employees (number/FTE)
132
929
0
0
1,061
Number of part-time employees (number/FTE)
2
5 0 0 7
*Gender provided by the employees themselves.
ESRS code: S1-6_07
S1-6_12 The company left 130 employees during the reporting period and the percentage of
employee turnover is 12.51% for this year.
S1-6_13 Employee data were compiled on the basis of internal records and systems and represent
the number as of 31.12.2024. The total number of employees represents the number of
people who have an employment contract and are on the payroll regardless of the type of
contract at the end of the year. Excluded from this number are external contractors and
workers provided by third parties.
S1-6_15 The number of employees is shown as a number as of 31.12.2024.
S1-6_17 Publication of cross-reference of information reported in S1-6_01 and S1-6_04 to the
most representative number in the financial statements
In accordance with the consolidated financial statements, as of December 31, 2024
Dalekovod Group had 1,056 employees. This number represents the most representative
available value for linking non-financial and financial indicators.
Coverage of collective bargaining and social dialogue
S1-8 Table 5 Reporting Form on the Coverage of Collective Bargaining and Social Dialogue
The Scope of Collective Bargaining Social dialogue
The rate covers Number of employees covered by
the collective agreement (EEA only*)
(for countries with more than 50
employees representing more than
10% of total employees)
Number of employees represented
by workers' representatives in the
workplace (EEA only*)
(for countries with more than 50
employees representing more than
10% of total employees)
80-100% Croatia Croatia
*European Economic Area
ESRS codes: S1-8_01, S1-8_02, S1-08_06
128
Diversity indicators
S1-9 Table 6 Gender distribution in the number of employees (number and percentage) at the
top management level
Gender distribution at top management level
ESRS code
Gender Number %
S1-9_01-
02
Men 14 93%
S1-9_01-
02
Women 1 7%
Out of a total of 15 employees at the top management level, 7% are women. Gender was
stated only by employees and there was no answer for gender "other".
Table 7 Distribution of employees (number and percentage) under 30 years of age,
between 30 and 50 years of age and those over 50 years of age
d Distribution of employees by age
ESRS code Age Number %
S1-9_03 <30 171 16.01
S1-9_04 30-50 573 53.65
S1-9_05
>50
324
30.34
S1-9_06 Publication of own definition used for top management
The top management in the Dalekovod Group is represented by members of the Management
Board of the Group and affiliated companies and employees one level below the Management
Board.
Adequate salaries
S1-10 All employees receive an adequate salary, in accordance with the applicable benchmarks.
Health and safety indicators
S1-14 Given that we are engaged in a high-risk activity, and the health and safety of our
employees are our number one priority, we pay special attention to the health and safety
management system. Therefore, we can announce that it covers 100% of the workforce.
We continuously monitor outcomes and improve occupational safety measures in order to
conduct our business in a way that is safe for our employees. We believe that the work of
occupational safety never ends and there is always one step more towards a safe
workplace. Education of employees in the field of occupational safety is one of the most
129
important prerequisites for the safe performance of business operations. The
management must also be educated and familiar with all aspects of occupational safety,
but also with its scope of responsibility. In order to achieve a high level of health and
safety within the Group, Dalekovod has set the goal of informing and educating
employees and strengthening their awareness so that they recognize their role in creating
a safe working space, reduce the number of accidents at work and promote a culture of
safety at all levels of the organization. As a result of all of the above and a careful analysis
of the results of previous years, listening to our stakeholders, and especially employees, in
2024 the Management Board made a decision to declare 2025 the Year of Safety at Work
with the slogan "Safe today for a more successful tomorrow". Designing, preparing and
implementing the campaign will be the basis for an even more successful business, a
responsible attitude towards employees and the community.
In this financial year, there were no deaths as a result of work-related injuries and work-
related illnesses for the Dalekovod Group's own workforce. However, there were equally
no deaths as a result of work-related injuries and work-related illnesses of other workers
working at the company's sites.
Table 16 Health and safety indicators
d Health and safety
ESRS code Measure 2024
S1-14_02
Deaths of own workforce
Number
0
S1-14_03
Deaths of other workers
Number
0
S1-14_04 Number of Occupational Injuries* Number 19
S1-14_05 Rate of Occupational Injuries* Rate (%) 10.35
S1-14_07
Lost days due to injuries
Number
633
*The number of hours worked by people and the rate includes all workers within the company's
own workforce and other workers working at the company's location.
In the reporting period, 19 injuries at work were recorded, with the rate of recorded
injuries for own workforce being 10.57 for own workforce and 10.35 for the entire total
workforce per 1,000,000 hours worked. The data for the calculation were collected from
internal records and systems, whereby in some companies the number of hours worked
was estimated on the basis of normal or standard working hours, taking into account
entitlements to periods of paid leave from work (e.g. paid leave, paid sick leave, public
holidays).
Compensation indicators (pay gap and total compensation)
S1-16 S1-16_01 Gender pay gap
130
As a member of the KONČAR Group, Dalekovod Group is committed to promoting equality
in remuneration and continuously monitors the ratio of total employee compensation to
gender, in accordance with its own DEI goals (Diversity, Equity, Inclusion).
Level of complexity Difference in salaries M/F
B0 0
B1
-21.23%
B2 4.72%
B3
-8.19%
B4 0
I2
0.41%
I3 -5.51%
I4
6.03%
I5 36.69%
I6 19.28%
I7
-18.77%
Graphical representation of the differences in contracted gross wages
between male and female gender by levels of complexity for Dalekovod
Group
S1-16_02 Total Annual Fee Ratio
S1-16_03 Disclosure of contextual information necessary to understand the data, how
the data are composed, and other changes to the underlying data to be taken into
account
Total compensation ratio = Total annual compensation for the highest paid person in the
company/total annual compensation for the average paid employee (excluding the
highest paid person) = 1:5.79
Cases, complaints and serious human rights impacts
S1-17 Dalekovod Group monitors human rights cases, complaints and serious impacts in
accordance with our corporate governance policy. During 2024 there were no cases,
complaints, or serious human rights-related effects.
S1-17_10 There were no serious cases of human rights violations and incidents related
to their own workforce
In 2024 there were no reported cases of human rights violations and incidents related to
its own workforce in Dalekovod Group.
131
ESRS S3 Affected Communities
Building and maintaining a good relationship with the local community is an essential part
of a sustainable business. At Dalekovod Group, we proudly encourage involvement in the
development of local communities. Set as a strategic goal, we plan to strengthen
corporate volunteering. In our Dual Materiality Analysis (DMA), two topics were identified
as important: impacts on the lands and areas of affected communities (affected
communities) and the health and safety of consumers and end-users of services and
products.
Scope of local communities relevant for reporting
Significant impacts, risks and opportunities and their interaction with the
strategy and business model
Significant impacts,
risks, opportunities
Description of significant impacts,
risks, opportunities
Stage in
the value
chain
Time horizon
ECONOMIC, SOCIAL AND CULTURAL RIGHTS OF COMMUNITIES
POSITIVE
EFFECT -
REAL
Positive
impact in
communities
Dalekovod Group operates with great care in
the communities in which it operates in order
to leave a positive impact. Through local
employment, the construction of critical
infrastructure, and indirectly through donations
and sponsorships, it contributes to the social
and cultural development of numerous
communities.
Dalekovod is the executor in projects defined by
investors, in charge of the strict
implementation of all previously defined
measures during the preparation, works and
abandonment of the infrastructure location.
Dalekovod adheres with due diligence to all
instructions given and all specific restrictions
and requirements of any location where it
performs work such as biodiversity locations,
urban areas and industrial plants. Dalekovod
enables open communication with
representatives of the communities in which it
operates in order to enable concerns to be
Own
business
Short-term
to long-term
132
raised. In addition, Dalekovod prescribes the
general responsibilities of employees who
should take all reasonable measures to prevent
the other party, such as an investor, partner,
supplier or other stakeholder, from performing
an action that an employee of Dalekovod Group
is not allowed to perform.
Significant impacts, risks and opportunities and their interaction with the
strategy and business model
S3. SBM-3 S3. SBM-3_01 All affected communities that may be significantly affected by business
are included in the scope of disclosure under ESRS 2
Dalekovod Group encompasses all types of communities that may be significantly
affected, including those located around production sites, transmission line routes or
transport infrastructure, and communities where infrastructure projects take place in the
Republic of Croatia and abroad. This covers all relevant communities within the scope of
the reporting, regardless of whether they are directly or indirectly affected.
S3. SBM-3_02 Description of the species of affected communities that are subject to
significant impacts
Affected communities include urban and rural areas where infrastructure is being
developed or works are being carried out on transmission lines and other energy or
infrastructure projects. The majority of Dalekovod Group's business takes place in
countries with a developed legal framework (EU, Scandinavia, USA) – where a strict
evaluation and building permit procedure is carried out, with the mandatory involvement
of the public.
S3. SBM-3_03 Types of communities subject to significant impacts through their own
operations or through the value chain
Own operations – Communities located at Dalekovod Group's production and business
sites or construction project locations.
133
Value chain – Dalekovod The Group procures most of its raw materials and components
from large suppliers within the EU, thus minimizing the risk of a significant negative
impact on communities in the supply chain (e.g. violations of human rights or
environmental standards).
S3. SBM-3_04 Occurrence of significant adverse effects (affected communities)
No significant negative effects were recorded on the communities affected by the
operations of the Dalekovod Group. Potential negative effects related to construction
locations, i.e. increased truck traffic, noise and dust are prevented by strict measures and
control mechanisms
S3. SBM-3_05 Description of activities that result in positive impacts and types of
affected communities that are positively affected or likely to be positively affected
In the event of significant positive effects on local communities, Dalekovod achieves them
through the following activities:
•
Local Recruitment
•
Infrastructure investment and modernisation
•
Donations and Sponsorships
•
Investing in youth and education
S3. SBM-3_06 Description of significant risks and opportunities arising from impacts
and dependencies on affected communities
No significant risks and opportunities were recorded for the communities affected by
Dalekovod Group's operations.
S3. SBM-3_07 Disclosure of whether and how the enterprise has developed an
understanding of how communities with certain characteristics or those who live in
certain contexts, or those who perform certain activities, may be at higher risk of harm
In all projects in which it is an investor and for all locations, Dalekovod Group implements
all requirements that are strictly defined by law and must always look at and process
potential and actual effects on the community. In projects in which Dalekovod Group acts
as a contractor, the investor is obliged to implement these requirements.
S3. SBM-3_08 Disclosure of Significant Risks and Opportunities Arising from Impacts
and Dependencies on Affected Communities Impacts on Specific Groups
134
No significant risks and opportunities were recorded for the communities affected by the
operations of the KONČAR Group.
Policies for Affected Communities
S3. MDR-P_07-08 Disclosures to be reported in the event that an enterprise has not
adopted policies
S3-1 Dalekovod Group actively contributes to the development of the communities in which it
operates through:
• Creating new jobs and promoting local employment.
• Involving local suppliers and partners in projects.
• Participation in infrastructure and social projects of importance to the
community.
• Respect for human rights and promote social inclusion.
• Supporting educational, cultural and sports initiatives.
Dalekovod Group has a Policy of Social Responsibility and Community Inclusion.
The most important policy content in this context is:
1. Sustainability Policy
o He sets goals and principles of sustainable business for the entire Dalekovod
Group, including responsibility to the community through partnerships,
investments in education, support for sports and cultural initiatives, and
encouraging volunteering among employees;
o It emphasizes continuous investment in the development and quality of life
of local communities, cooperation with young people and the academic
community, and open dialogue.
2. Rules of Conduct of the Dalekovod Group
o They prescribe standards of conduct for all employees, especially in relation
to socially responsible business that protects and improves conditions in the
social community in general and transparent external communication with
the local community.
3. Risk Management Policy
o It ensures the systematic identification, assessment and management of
risks that could negatively affect the communities in which Dalekovod Group
operates, with special caution towards risks that could negatively affect
safety, human rights or the environment.
135
The Strategy and Sustainability Policy as well as the business model of the Dalekovod
Group are aligned with the principles of social responsibility, which is reflected in every
segment of business.
Dalekovod Group also operates in accordance with international standards of sustainable
development – for example, it has been a member of the UN Global Compact initiative
since 2007, thus committing itself to the application of the highest ethical principles,
respect for human and labor rights, care for the environment and the fight against
corruption. Such a deep integration of ESG criteria into the strategy allows Dalekovod
Group to balance between achieving its strategic business goals and having a long-term
positive impact on the communities in which it operates, proving that economic growth
can go hand in hand with social well-being.
Dalekovod Group systematically manages potential business-related risks in order to
prevent undesirable impacts on business and stakeholders, including local communities.
The risk management policy provides for continuous identification, assessment and
control of risks, which supports the achievement of strategic goals, financial stability and
the protection of the company's reputation and the interests of all stakeholders.
Dalekovod Group has the lowest tolerance for risks that could compromise security,
violate regulations or negatively affect reputation. This cautious approach ensures that
potential negative impacts of business on the environment and the community are
noticed and mitigated in a timely manner.
Procedures for working with affected communities on impacts
S3-2. S3-2_08 Statement in case the company has not adopted a general process for
engagement with affected communities
Procedures for remediation of adverse impacts and channels through which
affected communities can raise concerns
S3-3 S3-3_16 Statement in case the company has not adopted a general process for
engagement with affected communities
Channels have been established at the level of individual companies and individual
projects through which stakeholders can express concerns (letter, email, telephone and
personal meeting as appropriate).
Regarding communication channels in the field - communication channels have been
established that are expected during the execution of works on projects (appointed
136
representatives of investors and contractors, chief engineers, work managers, etc.).
Responsible persons at each location and construction site have been defined.
In 2024 there were no inquiries from this category.
Taking action for significant impacts on affected communities, approaches to
managing significant risks and realizing significant opportunities related to
affected communities, and the effectiveness of these measures
S3-4 S3. MDR-A_13-14 Disclosures to be reported if the company has not adopted
measures
Targets for managing significant adverse impacts, driving positive impacts
and managing significant risks and opportunities
S3-5 S3. MDR-T_14-19 Disclosures to be reported if the company has not adopted the
objectives
Dalekovod Group has not adopted specific targets for managing significant adverse
impacts, encouraging positive impacts and managing significant risks and opportunities.
Dalekovod Group continuously manages potential negative impacts on affected
communities within its existing control environment, based on clearly defined internal
policies and procedures that include Risk Management Policy, Sustainability Policy and
additional quality, environmental and safety standards. The system of regular
assessments, monitoring mechanisms, transparent communication channels and
cooperation with relevant stakeholders has proven to be effective in preventing the
occurrence of significant negative impacts on local communities.
Given the proven effectiveness of the existing approach and the fact that no significant
negative impacts have been identified so far that require additional targeted
interventions, Dalekovod Group has not defined specific time-limited targets for
managing these risks. However, in accordance with good sustainability practices,
Dalekovod Group regularly monitors, evaluates and, if necessary, adjusts existing
procedures and, if the need arises in the future, will consider defining specific goals for
areas where an increased potential risk or opportunity for additional positive effects is
identified.
Dalekovod Group is clearly focused on the continuous achievement of positive social
impacts through Strategic Goal 7. "Continuous investments in the development and
quality of life of local communities". Within this strategic goal, clearly defined activities are
137
continuously implemented that aim to have a long-term positive impact on the
communities in which Dalekovod Group operates.
If needs or opportunities for additional management of specific impacts on communities
are identified in the future, Dalekovod Group will consider defining additional targets as
part of further improving its corporate practices.
ESRS S4 Consumers and End Users
Significant impacts, risks and opportunities and their interaction with the
strategy and business model
Significant impacts,
risks, opportunities
Description of significant impacts,
risks, opportunities
Stage in
the
value
chain
Time horizon
PERSONAL SAFETY OF CONSUMERS AND/OR END-USERS
POSITIVE
EFFECT -
REAL
Product
quality and
safety and
customer
information
Dalekovod uses quality, health and safety
management systems to ensure products and
services that do not pose a risk to users
throughout the product lifecycle.
Downstream
Short-term
to long-term
RISKS AND OPPORTUNITIES ASSOCIATED WITH CUSTOMERS AND END USERS
RISK
Product
safety
Risks related to product safety and customer
satisfaction include the possibility that
products or services do not meet safety
standards or user expectations. This can
result in injury, customer dissatisfaction,
product recalls, and potential legal and
reputational consequences.
>UNIFIED KATALOG_PONDERIRANI_10022025
【
Risk Rating - 10
】
Downstream
Short-term
to long-term
S4-SBM-3 S4. SBM-3_01 All consumers and end-users who may be materially
affected by businesses are included in the scope of disclosures under ESRS 2
The companies within the Dalekovod Group operate exclusively in the B2B environment
and therefore do not have a direct relationship with end consumers and users. Despite
this, Dalekovod Group is aware of its responsibility towards the end users of products and
services that, through our business partners, are placed on the market.
138
To ensure compliance with these principles throughout the entire value chain, we expect
our B2B partners to act in accordance with the principles of legality, ethics, human rights
protection, and high standards of product quality and safety. We regularly monitor
potential risks and implement internal procedures to prevent non-compliance with these
principles. In the reporting period, there were no cases of non-compliance related to
consumers/end users or reports of violations of business and human rights guidelines in
the downstream value chain.
All end users that could be materially affected by the operations of Dalekovod Group,
including impacts arising from its own operations, value chain, products or services, and
business relationships, are included in the scope of reporting under ESRS 2.
S4. SBM-3_02 Description of the types of consumers and end-users who are
subject to material impacts
Dalekovod Group has references in the electricity, transport and industrial sectors in more
than 130 countries, with the largest exports to EU countries
The main customer groups include:
• National Electric Power Companies (Generation, Transmission and Distribution of
Electricity)
• Railway operators (national and international railways)
• Infrastructure investors (large projects in the field of energy, transport)
These customers serve end users who may be potentially subject to significant impacts
related to the safety, quality and reliability of products and services, as well as the way in
which Dalekovod Group communicates and manages market feedback.
S4. SBM-3_03 Types of consumers and end-users subject to material impacts through
their own operations or through the value chain
Since Dalekovod Group, depending on the company within the Group, performs different
types of engineering, production and service activities, significant effects can affect:
1. Final users in the energy chain (e.g. households dependent on electricity supply)
2. End-users of the infrastructure (rail passengers, users of public infrastructure, etc.)
S4. SBM-3_04 Occurrence of material negative impacts (consumers and end users)
139
No significant adverse effects on end-users were observed. In case of possible
complaints or dissatisfaction, there are established channels and procedures (defined by
the ISO 9001 Quality Management System) for a quick response. In order to prevent
negative outcomes, Dalekovod Group continuously monitors customer satisfaction and
implements measures to improve services and products, with an emphasis on safety,
regulatory compliance and transparency.
S4. SBM-3_05 Description of activities that result in positive impacts and types of
consumers and end-users who are or are likely to be positively affected
Privacy of consumers and end users - Dalekovod Group implements GDPR and internal
data protection policies, as well as technical and organizational protection measures to
ensure complete user privacy.
Access to (quality) information - Dalekovod Group communicates in a timely and
transparent manner to customers, clients and users by providing information on security,
privacy and quality. Companies apply defined procedures for labeling products and
services, and access to customer and end-user information, including adequate
information about possible post-delivery activities and the environmental and social
impact of products and services throughout their life cycle.
Cooperation and product development - Dalekovod Group implements effective quality
management mechanisms and safety standards for the protection of customers and end
users, and transparently and comprehensively informs customers about products, their
safety features or instructions for use.
Product quality and safety and customer information - Dalekovod Group implements
effective quality management mechanisms and safety standards for the protection of
customers and end users, and transparently and comprehensively informs customers
about products, their safety features or instructions for use.
S4. SBM-3_06 Description of material risks and opportunities arising from impacts and
dependencies on consumers and end-users
Risks related to product safety and customer satisfaction include the possibility that
products or services do not meet safety standards or user expectations. This can result in
injuries, customer dissatisfaction, product recalls, and potential legal and reputational
consequences, and therefore Dalekovod Group systematically manages this risk.
140
S4. SBM-3_07 Disclosure on whether and how an understanding has been developed
of how consumers and end-users with specific characteristics, who work in certain
contexts or perform certain activities, may be more exposed to the risk of harm
Dalekovod Group has not identified specific vulnerable groups of end users that would be
extremely susceptible to a higher risk of damage. However, ISO 9001 compliant processes
include regular risk assessments and adaptation of procedures according to different
customer/product usage segments.
For example, for railway equipment and trains, special attention is paid to passenger
safety, system reliability and compliance with international standards (e.g. railway EN
standards).
Should a new group of users (e.g. with special needs) be identified, Dalekovod Group has
mechanisms and internal procedures in place to adapt its procedures and reduce risk.
S4. SBM-3_08 Disclosure on the material risks and opportunities arising from the
impact and dependence on consumers and end users that affect specific groups
Significant risks related to customers and end-users do not relate to specific groups. At
the same time, Dalekovod Group continuously monitors the different needs and
characteristics of users in order to identify possible vulnerabilities in time. Regular review
of feedback, complaints, satisfaction surveys, as well as direct communication, identify
possible new or specific needs in the market.
Policies for consumers and end users
S4-1 S4. MDR-P_07-08 Policies to manage material impacts, risks and opportunities
related to consumers and end-users
S4-1_01 Policies for the management of material impacts, risks and opportunities
associated with affected consumers and end-users
Dalekovod Group manages its significant effects, risks and opportunities on consumers
and end users primarily through policies at the Group level that define principles,
responsibilities and procedures regarding product quality, user safety, transparent
communication and respect for human rights. The most important policies in this context
are:
1. Sustainability Policy
141
o It sets goals and principles of sustainable business for the entire Dalekovod
Group, including environmental, social and economic aspects.
o It emphasizes responsible management of impacts on all stakeholders,
including customers and end-users, and requires a continuous assessment
of sustainability risks and opportunities.
2. Policy of the Integrated Management System for Quality, Environmental
Protection, Health, Safety at Work and Energy
o It includes continuous improvement of business performance, customer
satisfaction, environmental protection, health and safety, and energy
efficiency. The quality we build is in accordance with the ISO 9001:2015
standard. It is guaranteed by the system described in the Quality Manual and
is based on meeting the requirements of our customers.
o Quality occurs in all business segments and in all stages of the production
process and service provision. It is guaranteed by the consistent application
of a certified quality management system and continuous improvements.
The quality management system is implemented and is the responsibility of
all employees of the company, in accordance with their tasks, responsibilities
and powers, at all times and in all segments of the company's business.
o It defines clear responsibilities for ensuring the quality and safety of products
and encourages open communication on social and environmental aspects
relevant to consumers/end-users.
3. Code of Conduct (Code) of the Dalekovod Group
o They govern the Group's ethical principles, including lawful business,
integrity, equality, respect for human rights, and transparent business
practices.
o They prescribe standards of conduct for all employees, especially in relation
to fair treatment of customers and the protection of their interests.
4. Dalekovod Group Risk Management Policy
o It establishes a framework for identifying, assessing and mitigating risks that
may jeopardise strategic and operational objectives, including those related
to consumers/end users.
o It is based on the principles of good practice and methodological guidelines
of the ISO 31000 standard and provides a proactive approach to detecting
and addressing possible adverse impacts on users.
142
Together, these policies cover significant risks and impacts of product safety, quality,
and customer satisfaction, while recognizing opportunities for strengthening customer
relationships, innovation, and sustainable solutions.
Procedures for engaging with consumers and end-users on impacts
S4-2. S4-2_01. Disclosure of whether and how the perspectives of consumers and end-users
have influenced decisions or actions aimed at managing actual and potential impacts
Dalekovod Group systematically involves customers through whom the perspectives of
consumers and end users/investors are considered in the identification of actual and
potential impacts, using structured processes within the integrated management system
(ISO standards) and the Risk Management Policy. Engagement takes place at all stages of
the business cycle – from the definition of procurement requirements and project
planning to post-project support.
The perspectives of the user/investor directly influence key decisions on the improvement
of products/services, while the success of engagement is monitored through satisfaction
indicators, monitoring of complaints and internal/external audit of the quality system.
In this way, Dalekovod Group ensures transparent and efficient communication and
continuous improvement in order to improve relations with all stakeholders, reduce risks
and take advantage of opportunities for innovation and development.
Procedures to remedy adverse impacts and channels through which
consumers and end-users can raise concerns
S4-3 S4-3_01 Disclosure of the general approach and process for providing or
contributing to a correction where the company has determined that it is associated
with a material negative impact on consumers and end-users
S4-3_02 Disclosure of specific channels that have been set up so that consumers
and end-users can directly voice their concerns or needs to the business and that they
are addressed
S4-3_03 Disclosure of the processes through which the enterprise supports or
requires the availability of channels
As part of the ISO 9001 quality management system, Dalekovod Group companies have
defined procedures for managing complaints, reclamations and potential negative impacts
143
on consumers/end users. Channels have been set up at company and project level
through which these stakeholders can raise concerns (letter, email, telephone).
No irregularities related to regulations and voluntary codes on the impact of products and
services on the health and safety of customers/users during their life cycle have been
recorded in the companies of the Dalekovod Group.
Taking measures for significant impacts on consumers and end-users,
approaches to managing significant risks and materialising opportunities
related to consumers and end-users, and the effectiveness of those
measures
S4-4 S4. MDR-A_13-14 Disclosures to be reported if the company has not adopted
measures to manage significant impacts, risks and opportunities related to consumers
and end-users
S4-5. The Dalekovod Group has established processes in its operations that are built into
functions that have a day-to-day responsibility for ensuring compliance with our policies.
Consumer and end-user issues are also continuously addressed through our ISO 9001
certifications.
Management information
ESRS G1 Business Conduct
Significant impacts, risks,
opportunities
Description of significant
impacts, risks, opportunities
Stage in
the value
chain
Time horizon
CORPORATE CULTURE
POSITIVE
EFFECT - REAL
Ethical
management
Ethical management through set
codes of conduct and values
ensures compliance with ethical
standards in all management
processes, which increases the
trust of stakeholders and the public.
Own business
Short-term
to long-term
POSITIVE
EFFECT - REAL
Alignment with
sustainable
strategic goals
and
transparent
regular
The transmission line already has
transparency and strategic
consistency in place in supporting a
green and sustainable economy.
Long-term benefits include
maintaining stakeholder trust,
Own business
Short-term
to long-term
144
reporting to
stakeholders
on
achievements,
plans and
challenges
strengthening corporate reputation,
and complying with ESG standards.
The changes are significant and
long-lasting, with a visible impact
on key business processes and
stakeholder relations.
WHISTLEBLOWER PROTECTION
POSITIVE
EFFECT - REAL
Availability of
whistleblowing
and
whistleblower
protection
mechanisms
Providing secure whistleblowing
mechanisms and protecting
whistleblowers are key to
preventing and detecting illegal and
unethical practices.
Own business
Short-term
to long-term
SUPPLIER RELATIONSHIP MANAGEMENT
POSITIVE
EFFECT - REAL
Code of
Conduct for
Suppliers
Dalekovod incorporates social and
environmental criteria into
procurement procedures, ensuring
the sustainability of the supply
chain. With the Code of Conduct for
Suppliers, Dalekovod has set
standards for ESG criteria and
promotes responsible business
operations throughout the supply
chain. Maintaining fair and
transparent relationships with
suppliers is essential for supply
chain stability. Fair contracting,
respect for payment deadlines and
responsible sourcing reduce risks,
foster long-term partnerships and
enable a more sustainable supply
chain.
UpstreamOwn
business
Short-term
to long-term
POSITIVE
EFFECT -
POTENTIAL
ESG Risk
Verification
ESG risk screening of strategic
suppliers has the potential to
ensure sustainability and reduce
risks in the supply chain.
UpstreamOwn
business
Short-term
to long-term
CORRUPTION AND BRIBERY
POSITIVE
EFFECT - REAL
Zero tolerance
for corruption
Dalekovod applies the principle of
zero tolerance to corruption, and all
employees and suppliers are
familiar with anti-corruption
policies and procedures.
UpstreamOwn
business
Short-term
to long-term
145
Transparency and clearly defined
procedures help to combat
corruption.
RISKS AND OPPORTUNITIES ASSOCIATED WITH BUSINESS CONDUCT
RISK
Unavailability
of
components,
raw materials
and materials
The risk of delays in deliveries to
customers due to difficult
availability of components,
unavailability of raw materials and
materials, and difficult organization
of transport.
Upstream
Short-term
to long-term
RISK Discrepancy
Risk of fines and/or litigation due to
non-compliance with positive
regulations and standards.
Reputational risk of non-
compliance with ESG regulatory
requirements.
Own business
Short-term
to long-term
RISK
Failure to
comply with
ESG standards
in the supply
chain
Failure to comply with ESG
standards in the supply chain can
lead to legal and reputational
losses.
Upstream,Own
business
Short-term
to long-term
Role of administrative, supervisory and management bodies
G1.GOV-1 - Link to ESRS 2, GOV-1 and GOV-2
Business Conduct Policies and Corporate Culture
G1. MDR-P_01-06 Policies to manage its significant impacts, risks and opportunities
related to business conduct and corporate culture
G1-1 Corporate Governance Policy
The Dalekovod Group integrates ESG principles into its governance structures to ensure
effective implementation and adherence to corporate governance best practices. As a
member of the UN Global Compact since 2007, we are committed to operating according
to principles in the field of human rights, labour law, environmental protection and anti-
corruption and to report regularly on this in the Reports on Social Responsibility.
As a company whose shares are listed on the Zagreb Stock Exchange, Dalekovod Group
reaffirms its obligations to ensure comprehensive social, ethical and environmental
146
practices in its operations as well as throughout the entire value chain in each market in
which it operates.
Our management principles include:
• Ethical Business: We ensure high standards of corporate ethics through strict anti-
corruption and anti-bribery measures, including employee training and regular risk
assessments.
• Transparency and accountability: We regularly monitor and report on progress
towards sustainable goals, with independent audits to ensure data accuracy.
• Stakeholder engagement: We actively engage with all our stakeholders, listen to
their needs and involve them in the decision-making process.
• Regulatory compliance: We comply with international and European regulations and
continuously monitor changes in legislation to ensure compliance with all legal
obligations.
• Quality Management: We apply the ISO 9001:2015 quality management system to
ensure that all processes meet high quality standards.
• Application of the Code of Corporate Governance of the Zagreb Stock Exchange and
the Code of Conduct of the Dalekovod Group
Also, our anti-bribery and anti-corruption policy defines and regulates the areas that are
most exposed to the risk of corruption/bribery:
• treatment of public officials;
• gifts and business hospitality,
• third-party engagement and donations/sponsorships/memberships;
• activities in the field of human resource management,
Protection of whistleblowers
Dalekovod Group encourages a culture of open communication and provides protection to
whistleblowers who report irregularities or violations of our policies and laws in good
faith. It ensures confidentiality and takes all necessary measures to protect against
retaliation.
The whistleblower protection policy is an integral part of the Sustainability Policy, which is
publicly available on the website of Dalekovod Grup d.d.
Furthermore, detailed reporting procedures are prescribed through the Ordinance on the
Procedure for Internal Reporting of Irregularities and the Appointment of a Confidential
Person, which, among other things, prohibits the prevention of reporting irregularities and
putting whistleblowers in a disadvantageous position.
147
Vendor Relationship Management
G1-2 Dalekovod has a close relationship with its suppliers and invests in maintaining a good
relationship. Suppliers are required to comply with General Terms and Conditions, which
are publicly available on the website. These conditions include provisions on information,
material declaration, hazardous substances in electrical and electronic equipment (RoHS),
packaging, dangerous goods, environmental protection, and the prevention of bribery and
corruption. In addition, our Code of Conduct for Contractors, which defines relationships
and acceptable behavior and defines key values on important topics such as human rights
and a clearly based policy to ensure safety and health criteria, ethical behavior and respect
for human rights and employee rights in accordance with regulations and applicable laws.
We expect from our suppliers:
• Respect for ethical and social standards, including practices aimed at combating
bribery and corruption.
• Compliance with our policies and values in the areas of quality, environmental,
labour and human rights.
• Transparency and collaboration to continuously improve sustainability in the supply
chain.
G1-2_01 Although the company does not currently have a formally adopted policy to prevent late
payments, it implements a number of internal practices that ensure the timely settlement
of obligations to suppliers, especially to small and medium-sized enterprises. These
practices include:
1. Established system of internal payment controls – The finance department regularly
monitors the maturity of liabilities and ensures that all liabilities are paid within the
agreed deadlines.
2. Timely processing of invoices – Invoices are received and posted as soon as possible
after receipt, which enables their timely payment without unnecessary delays.
3. Monitoring of payment deadlines – Average payment terms are regularly analysed to
ensure that practices remain in line with internal targets and market standards.
G1-2_03 An integral part of Dalekovod's business policy and practice includes quality management,
and supplier verification was systematically carried out, which is part of the identification
of hazards and the assessment of risks and opportunities. When selecting suppliers for
individual groups of materials and services, the condition is that they meet the defined
requirements for quality, delivery times, price and payment method, as well as
148
environmental protection measures and other measures such as health and safety at
work and additionally stated in the forms. Suppliers are required to provide evidence
(certificates) of compliance with the requirements. Companies keep a database of existing
and potential suppliers. In addition to basic information about suppliers (name, address,
telephone, e-mail, contact person), the database also contains other information that may
affect the choice of suppliers, such as supplier references, complaint data, quality system
data, data on occupational health and safety, as well as environmental protection.
Supplier verification is done through a questionnaire and by submitting a document (e.g.
certificates from international standards such as ISO 9001:2015 for quality management,
ISO 14001:2015 for environmental management, ISO 50001:2018 for energy
management or ISO 45001:2018 for occupational health and safety) as a compliance
check. The questionnaire covers key topics in terms of environmental, social and
governance factors. Social and environmental criteria are included through a
questionnaire and influence the supplier selection process as well as the verification.
G1-2_02 Our suppliers and their relationship
Most of our suppliers are based in European Union countries. The list of suppliers is
defined by internal procedures, and the verification of existing and new suppliers is carried
out by employees of the procurement department of Dalekovod through a survey. All
suppliers who have implemented certified systems according to ISO 9001, ISO 14001, ISO
50001 and ISO 45001 are automatically entered into the list of eligible suppliers. In the
questionnaire, all suppliers fill in information on the quality management system,
business environmental impacts, respect for labor and human rights, non-discrimination
and providing equal opportunities to all workers, management practices according to
ethical principles for combating bribery and corruption, and avoiding child labor.
Cooperation with suppliers is based on the principles and requirements of ISO standards
related to continuous improvement of product quality and process management – ISO
90001:2015, environmental management – ISO 14001:2115 and energy – ISO
50001:2018 and health and safety management systems – ISO 45001:2018. According
to the principles and requirements of these standards, operational procedures for all
business processes and procedures for the procurement of products and services
necessary for the production and provision of services of the companies of the Dalekovod
Group have been defined.
149
Significant suppliers are evaluated at the end of each year, taking into account the quality
of performance and deliveries within the set deadlines. Significant suppliers are
determined based on the nature of the business relationship, participation in the
significant project and the monetary value of payment for goods, services and works. The
number of suppliers varies significantly from year to year and depends on the projects
that are carried out and the goods, services and works that are procured. The selection of
suppliers often begins in the project bidding phase, when potential suppliers and the
conditions with which the bidding process is entered are defined, and investors often
define in advance several suppliers whose equipment is used in the implementation of the
project within the tender documentation. The result of the work obtained in the tender is
the signing of contracts with the best equipment suppliers for each individual project.
Annual contracts are concluded with suppliers for anticipated procurements, which are
repeated regardless of the projects themselves. Other annual contracts refer to services
and certain materials, the procurement of which is carried out independently of the
projects themselves. The General Terms and Conditions of the Dalekovod Group are
publicly available on our website. Article 10. The General Terms and Conditions govern
information, material declaration, hazardous substances in electrical and electronic
equipment (RoHS), packaging, dangerous goods and environmental protection, and Article
11 regulates the prevention of bribery and corruption and the Code of Conduct for
Contractors. In 2024 we cooperated with 24 significant first-tier direct suppliers and there
were no new suppliers.
Supplier checks
Dalekovod manages its relations with suppliers in accordance with policies and contracts.
Each supplier contract regularly goes to supplier checks and collects information from
suppliers to monitor ESG risks through questionnaires.
Table: Vendor Relationship Management
ESRS code
Vendor Relationship Management
2024
Target
G1-2_02 Percentage of verified suppliers 72.34%
G1-2_02 Percentage of compliant* suppliers 79.92%
In our industry, Scope 3 emissions account for a large proportion of all total emissions. In
industries like ours with complex supply chains, up to 70% of emissions can come from
150
scope 3
1
. Aware of this fact, Dalekovod Group monitors the practices of its suppliers. The
key suppliers for our industry are primarily from the GHG Protocol categories 1, 3, 5, and 2
which are in the areas of goods and services, transport and fuels, waste and capital goods.
79.92% of suppliers are in compliance with our terms and conditions, code and verified
through questionnaires and document delivery. The total percentage includes all suppliers
exceeding €50,000. The procedure does not assess a small part of suppliers outside the
key scope (this includes banks, utilities or accommodation that makes up a small part of
the supply chain).
Prevention and detection of corruption and bribery
G1-3 Dalekovod Group is continuously working to raise the levels of competence and
knowledge of its employees. Trainings are conducted in various areas, primarily those for
which interest has been expressed among employees and in areas that are classified as
priorities in relation to the type of activity that the company is engaged in. And at the end
of 2024 it was adopted Anti-Corruption Policy with a view to further action in the fight
against corruption and bribery. The anti-corruption policy provides for a corruption risk
assessment in order to identify all corruption risks associated with a particular business
transaction, project or contract in a timely manner, in order to take measures to reduce
the risk of corruption to an acceptable level, if necessary. Specific areas have been
identified in which the risk of corrupt behavior of participants is the rules of procedure,
such as donations or sponsorships, gifts, suppliers and other associates, the recruitment
process, conflicts of interest, and accounting and financial reporting.
G1-3_02 Investigators conducting investigations within the Transmission Line are independent of
the chain of custody responsible for prevention. This independence ensures the objectivity
and impartiality of investigations and allows for transparent fact-finding and evidence-
based decision-making. Although there is no formally prescribed internal procedure, in
practice Dalekovod ensures that investigators are not part of the management that is
responsible for prevention, thus eliminating conflicts of interest. The Company intends to
further formalize this practice through internal policies and procedures.
G1-3_03 The Company ensures transparent reporting on the results of irregularity investigations to
the Management Board and/or the Supervisory Board, depending on the seriousness of
the case. The process involves the following steps:
1
https://www.weforum.org/stories/2023/09/scope-3-emissions-are-key-to-decarbonization-but-what-are-they-
and-how-do-we-tackle-them/?utm_source=chatgpt.com
151
1.
Conducting an investigation – Investigators (internal or external) analyze the
reported irregularity in accordance with the applicable regulations and policies of
the Company.
2.
Preparation of reports on findings
3.
If the irregularity is less risky, the report is submitted to the Administration.
4.
In the case of a serious irregularity with a potential impact on the Company's
operations, finances or reputation, the report shall also be submitted to the
Supervisory Board.
5.
Consideration of the report – The Management Board and/or the Supervisory
Board analyze the report and make decisions on taking corrective measures.
Monitoring the implementation of measures – the Directorate regularly monitors
whether the proposed measures have been implemented and, if necessary, reports to the
Supervisory Board on progress
The criteria important for assessing the risk of corruption vary depending on the
circumstances and type of business relationship, but the general criteria that are taken
into account when assessing each business relationship are as follows:
• Corruption risk associated with doing business in a specific country
• Type of buyer in terms of whether it belongs to the private or public sector
• Circumstances of the individual case (contract value, complexity of the job, type
of procurement)
• Business partner/intermediary (if the business is contracted through an agent or
intermediary, reputation of the business partner, relationship with the customer,
role and scope of work, size of the company, amount of service fee)
• The existence of a proportion between effort, risk and reward.
A risk assessment is always made when there is a justified reason for it or when it is an
essential condition of a job or a mandatory requirement.
The methods used to mitigate and control the risk of corruption include:
• employee education and
• familiarizing suppliers with this Anti-Corruption Policy and other internal acts of
the Company that regulate the standards of business conduct.
The role and exemplary behavior of Management Board members and managers are key
factors in educating about values and their dissemination in order to ensure the
implementation of these values in practice.
152
G1-3_07 The topics of corruption and bribery have been detected as important, and a process for
detecting risky functions and an education plan are being prepared for 2025. Through the
Code of Conduct, ethical violations are defined. It is additionally clearly emphasized
against giving and receiving gifts during business representation. Although currently the
percentage of risky functions covered by training programs is still 0%.
G1-3_08 Dalekovod Group does not have an appointed person responsible for anti-corruption. The
person will be appointed by the end of 2025.
Confirmed cases of corruption or bribery
G1-4 In this financial year, Dalekovod Group had no convicted verdicts of corruption or bribery,
nor any fines.
Payment Practices
G1-6 In their business, the companies of the Dalekovod Group strive to settle their obligations
to suppliers within the deadlines agreed in contracts. Monetary liabilities are regulated by
the Financial Operations and Pre-Bankruptcy Settlement Act. As a rule, Dalekovod Group
companies settle their obligations within the legally stipulated deadline (30-60 days), with
the exception of contracts where longer payment terms have been agreed in writing
(retention under contracts for complex projects). Based on the analysis of payment data
to Dalekovod Group's suppliers, the status of payments under standard conditions and
possible legal procedures related to delays are presented.
Company
The average number of days
to pay an invoice from the
date on which the
contractual or statutory
payment term begins to run
Percentage of
payments compliant
with the company's
standard payment
terms*
Number of pending
legal proceedings
due to late
payments
Dalekovod d.d. 53 69% 1
Dalekovod OSO
98
44% 1
Dalekovod MK
76
34% 0
Dalekovod Projekt
110
92% 0
Dalekovod EMU
56
94% 0
Dalekovod Mostar
16
100% 0
Dalekovod Ljubljana
30
100% 0
ESRS codes: G1-6_01, G1-6_02, G1-6_03, G1-6_04
The turnover ratio of liabilities is 3.20, and the average turnover days of liabilities are
114.14 days
153
Only debt transactions of suppliers through bank transactions, which represent 45% of
turnover, were analyzed. The remaining 55% of turnover refers to branches (Norway,
Sweden) that have confirmed standard payment terms of 30 days and regularly settle
obligations, and the percentage in this part of the business is 100% compliance with
standard payment terms
The calculation does not include billing items, compensations, assignments and direct
payments to subcontractors, and the standard payment condition for Dalekovod d.d. is
defined as 60 days for easier consolidation.
For the sake of data availability, the calculation assumes that there are no partial
payments or takes into account the above regardless of the number of payments, i.e. each
payment of a part of the invoice is treated as one invoice, and for this reason there is a
fictitious increase in the payment day for some companies within the Dalekovod Group.
Through 2025, Dalekovod Group will increase the availability of data related to payment
practices and thus improve the calculation methodology.
G1-6_05 Disclosure of contextual information regarding payment practices
Sales-related commissions, rebates, discounts, and add-ons are common business
salaries. Illegal or unethical payments are not allowed, and regular payments must comply
with applicable currency exchange controls and tax regulations. Dalekovod Group strives
to settle its obligations to suppliers within the deadlines in accordance with contracts,
regulations and the Code of Conduct and in accordance with the legally stipulated deadline
(60 days). The group has only two pending cases.
Topics of particular importance specific to Dalekovod Group – Project management
Efficient project management is the basis of the successful business of the Dalekovod
Group. Projects are managed according to internal procedures, and are divided into projects
in the field of energy and projects in the field of infrastructure. In order to optimize the
involvement of employees at the operational and management level who participate in the
planning and implementation of a particular project, as well as to effectively manage time,
financial resources and mitigate external influences such as the previous pandemic years
and geopolitical instability, the Dalekovod Group continuously monitors all phases of each
project. In the implementation of projects, we manage risks in accordance with the publicly
published Risk Management Policy according to the principles of the HRN ISO 31000
standard.
The progress of the implementation of projects in the field of energy and infrastructure is
monitored at weekly extended operational meetings attended by project managers and
154
coordinators, civil engineers, head of assembly groups, sales representatives, head of
operational logistics and representatives of companies in charge of design (Dalekovod
projekt) and production of parts used in the implementation of the project (MK Production
and OSO Production).
Operational courses are held, which are also attended by members of the Management
Board of the Dalekovod Group, and once a month operational courses with financial data
are held. The monthly operating course with financial data, depending on the
implementation of a particular project, can be replaced by a quarterly meeting at which the
Management Board is informed about the implementation of the project with financial
results and the results of individual companies. Once a year, representatives of branches
abroad also participate in these operational meetings with the Management Board.
In order to monitor the operations and realization of the plans of the members of the
Dalekovod Group, weekly meetings and meetings related to cash flow management are
held, which are attended by representatives of realization, operational logistics,
procurement, treasury, MK and OSO production, as well as the member of the Management
Board in charge of finance. A written report on the management of cash flow is submitted
to the Management Board every two weeks. Other parts of the Dalekovod Group,
depending on their competencies, such as sales, corporate communications, procurement,
operational logistics, human resources management, business excellence, improvement of
business processes, legal affairs and other members of the group outside the core
activities, report to the Management Board on the results prescribed by the dynamics.
Project implementation and management processes are an integral part of the procedures
within the Quality Management System according to the ISO 9001:2015 standard. The
system refers to quality management in sales and construction activities, power lines and
power plants up to 750 kV, railway infrastructure, roads, buildings, sports facilities, lighting,
telecommunication lines and poles, lighting poles and halls, steel and other load-bearing
structures, equipment of civil engineering facilities and electrical installations, suspension
and connecting materials and the provision of anti-corrosion metal protection services.
The quality management policy and the certificate, which is valid until November 3, 2024 are
published on our website. In the implementation of projects, we manage environmental
impacts, rational use of energy, and the protection and safety of workers in accordance with
established and certified systems according to ISO standards described in the chapters
Society and Human Rights and Environment. The projects are also implemented in accordance
with the Code of Conduct of the Dalekovod Group and the Code of Corporate Governance of
the Zagreb Stock Exchange.
155
Publications in accordance with Article 8 Regulation (EU) 2020/852
(Taxonomy Regulation).
The potential of the contribution of the Dalekovod Group's economic activities to the EU
Green Deal in 2024.
In accordance with the obligations arising from the regulatory framework of sustainable finance of
the EU, in the non-financial report for 2024 the Dalekovod Group assessed whether the activities
performed by each component of the group are acceptable, i.e. harmonized in relation to the EU
Taxonomy. In order to contribute to the goal of the EU Green Deal and ensure compliance with the
EU regulatory framework, for the purposes of this year's report, the Dalekovod Group, with the
support of expert consultants, conducted a detailed analysis of each business segment, which
included various professional services from each sector, the details of which are described below.
Analysis of taxonomy-eligible activities
Dalekovod Group has analysed its taxonomy-friendly and compliant economic activities following
a methodology aligned with the Taxonomy Regulation
2
and technical screening criteria
3
. In order
to meet the conditions prescribed by the Disclosure Delegated Act
4
, the Dalekovod Group first
identified its taxonomy-eligible activities by examining in detail whether the descriptions of
individual activities contained in the technical screening criteria correspond to the activities that
the companies actually perform (not only those for which they are registered). The result of this
analysis, i.e. the activities of the Dalekovod Group that have been identified as taxonomically
acceptable, and to which financial indicators for 2024 could be linked, are shown in the table
below.
Taxonomy acceptable activities of the Dalekovod Group:
Area
Activity
(U) – climate
change mitigation
(P) – climate
change adaptation
Name of activity
3. Manufacturing industry
3.1 (U)
Production of renewable energy technologies
3.20(U)
Manufacture, installation and servicing of high-
voltage, medium-voltage and low-voltage
2
REGULATION (EU) 2020/852 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 18 June 2020 establishing a
framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088
3
COMMISSION DELEGATED REGULATION (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European
Parliament and of the Council by establishing technical screening criteria to determine under which conditions an economic activity is
considered to contribute substantially to climate change mitigation or adaptation and whether that economic activity causes significant harm
to any other environmental objective
4
COMMISSION DELEGATED REGULATION (EU) 2021/2178 of 6 July 2021 supplementing Regulation (EU) 2020/852 of the European
Parliament and of the Council by specifying the content and presentation of information on environmentally sustainable economic activities
to be disclosed by undertakings subject to Article 19a or Article 29a of Directive 2013/34/EU and laying down a methodology for mandatory
disclosures
156
electrical equipment for the transmission and
distribution of electricity that contributes
substantially to climate change mitigation or that
enables such a contribution
6. Transportation
6.5 (U)
Transport by motorcycles, passenger cars and light
commercial vehicles
6.6 (U) Road haulage services
6.15 (P)
Infrastructure for road and public transport
7. Construction activities and
real estate business
7.1 (U)
Construction of new buildings
7.4 (U)
Installation, maintenance and repair of electric
vehicle charging stations in buildings (and in
parking spaces connected to buildings)
7.6 (U)
Installation, maintenance and repair of
renewable energy technologies
7.7. (U) Purchase and ownership of buildings
Activities by contribution to the remaining 4 environmental objectives: use and protection of water
and marine resources, transition to a circular economy, prevention and control of pollution, or
protection and restoration of biodiversity and ecosystems, for which technical criteria were
published in November 2023 were also analysed.
4
The following activities have been recognized as acceptable in the above 4 environmental goals:
For the objective Water supply, sewage disposal, waste management, and environmental
remediation
- 2.3. Collection and transport of non-hazardous and hazardous waste
For the objective Transition to a circular economy:
- 3.2. Renovation of existing buildings
- 3.3. Demolition and smashing of buildings and other structures
- 3.5. The use of concrete in civil engineering
For the goal Protection and restoration of biodiversity and ecosystems
- 1.1. Conservation, including restoration, of habitats, ecosystems and species
Objective: Pollution prevention and control
- 2.1.Collection and transport of hazardous waste
For these activities, it was difficult to separate the indicators and they were not taken into account
in the calculation.
157
For activities in the field of circular economy, which are part of the contracted projects and the
amounts cannot be separately stated at this time, a system of separation from projects will be
established in 2025.
Analysis of taxonomy-eligible activities
In the next phase, the Dalekovod Group analyzed which of the taxonomically acceptable activities
can also be considered taxonomically aligned. The verification of taxonomic compliance was
carried out through three steps, as required by the requirements of the EU Taxonomy:
• for each taxonomy-eligible activity at the level of the Dalekovod Group, a verification was
carried out whether it contributes significantly to one of the two climate objectives
5
defined
in Article 9 of the Act. Taxonomy Regulation and subsequently
• carried out a verification of whether each taxonomically acceptable activity complies with
the criterion of no significant harm in relation to the remaining five environmental
objectives.
• Finally, a verification of compliance with minimum safeguards was carried out
The following have been identified as taxonomy-eligible activities with indicators that could be
unambiguously linked to the financial statements, and for which the technical criteria of significant
contribution, i.e. DNSH criteria, were not met:
- 3.1. (U) Production of renewable energy technologies related to the construction of
transmission lines to renewable energy sources through economic activities classified
under C25, C26 and C27 - according to the NACE classification
- 3.20. Manufacture, installation and servicing of high-voltage, medium-voltage and low-
voltage electrical equipment for the transmission and distribution of electricity that
contributes substantially to or enables climate change mitigation
- 6.5. Transport by motorcycles, passenger cars and light commercial vehicles,
- 6.6. Road freight transport services,
- 6.15 (P). Infrastructure for road and public transport,
- 7.1. Construction of new buildings.
- 7.4. Installation, maintenance and repair of electric vehicle recharging points in buildings
(and in parking spaces connected to buildings)
- 7.6 (U) Installation, maintenance and repair of renewable energy technologies
4
Commission Delegated Regulation (EU) 2023/2486 of 27 June 2023 supplementing Regulation (EU) 2020/852 of the European Parliament
and of the Council by establishing technical screening criteria to determine under which conditions an economic activity is considered to
contribute substantially to the sustainable use and protection of water and marine resources, to the transition to a circular economy, to the
prevention and control of pollution, or to the protection and restoration of biodiversity and ecosystems, and whether that economic activity
causes significant harm to any other environmental objective and amending Commission Delegated Regulation (EU) 2021/2178 as regards
specific public disclosures relating to those economic activities
5 The Taxonomy Regulation defines six environmental objectives (climate change mitigation, climate change adaptation, sustainable use and
protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of
biodiversity and ecosystems), but currently, due to a lack of regulation, technical screening criteria are only applied for the first two (climate)
objectives.
158
- 7.7. (U) Purchase and ownership of buildings
For these activities, the technical criterion in which the economic activity is related to the
production of technologies for the production of energy from renewable sources is met. Also, the
activity meets the DNSH criteria, for which the Dalekovod Group has prepared a Climate Risk and
Vulnerability Assessment (CRVA).
For other recognized eligible activities, it was concluded that the verification of all the above
criteria is difficult to verify, i.e. that within individual activities it is difficult to determine which part
of the activity is potentially harmonized and which is not.
The primary activity of the Dalekovod Group, i.e. the construction of transmission lines, depends
on the client's activity, and it is expected that with the increase in the production of energy from
renewable sources, the share of coordinated activities of the Dalekovod Group will also increase.
Furthermore, as the final part of the compliance analysis, the Dalekovod Group also analyzed the
current state of the minimum safeguards set out in Article 18 of the Act. Taxonomy Regulation,
which are detailed in the final report of the Platform on Sustainable Finance from October 2022
6
.
The Dalekovod Group operates in accordance with the Code of Conduct, the Code of Conduct of
the Dalekovod Group, the Code of Ethics in Business of the Croatian Chamber of Commerce, the
Code of Corporate Governance, which contain, among other things, rules and provisions on data
protection, honesty in work and business, avoidance of conflicts of interest and respect for human
rights. In order to manage safety and security at work, we have introduced a system according to
the ISO 45001:2018 standard. Furthermore, in human resources management and making
important business decisions, the principles of equality and uniform criteria are respected. The
Dalekovod Group operates in accordance with positive legal regulations prohibiting child, forced or
compulsory labor. Within all companies of the Dalekovod Group and in all business activities, there
is freedom of association and collective, and this also applies to business activities outside Croatia.
The Dalekovod Group also conducted an analysis and review of the Dalekovod Group's
requirements for compliance with the Minimum Safeguards in accordance with the SG4 Report of
the Sustainable Finance Platform. The report identifies four key topics for which compliance with
minimum safeguards needs to be defined. These are:
• Human rights, including workers' rights.
• Bribery/corruption
• Taxation
• Fair competition
6
Available at https://finance.ec.europa.eu/system/files/2022-10/221011-sustainable-finance-platform-finance-report-minimum-
safeguards_en.pdf
159
In the above analysis, it was concluded that the Dalekovod Group meets the criteria of compliance
with the Taxonomy Regulation in the field of Minimum Safeguards, in accordance with Article 18
of the said Regulation.
For 2024. Dalekovod will not report on compliance even though compliance conditions have been
met for some activities, but will start reporting on compliance for 2025.
Accounting policies and key performance indicators
After the analysis of taxonomy-eligible and compliant activities, the Dalekovod Group collected
data for the calculation of key performance indicators (KPIs) in relation to the identified activities,
namely: revenues, capital expenditures and operating expenses.
For the calculation of KPUs, Dalekovod Group has analysed its own financial data in order to
include complete and accurate data in the calculation of each KPU and to properly report them in
accordance with the Delegated Act on Disclosures. As prescribed, when calculating taxonomy-
acceptable KPUs, the Dalekovod Group took into account that each item can be included in only
one activity, i.e. they were guided by the principle of "avoiding double counting" of the same data
in different KPUs, while the estimates used are described later in the text.
For the purposes of this report, each KPU is expressed consolidated at the level of the Dalekovod
Group, and an overview of qualitative information is provided for each KPU. Below are the
identified taxonomy-eligible – non-harmonized activities, and the harmonized activities of the
Dalekovod Group, with an overview of the calculated KPUs for revenues, capital and operating
expenditures for eligible and non-harmonized, harmonized and ineligible activities, in accordance
with the EU Taxonomy.
Finance
For the purpose of calculating the revenue-related KPU, the companies divided the net turnover
generated from services and products related to taxonomy-eligible activities (numerator) and the
total net turnover (denominator) as set out in point 1.1.1. Annex I to the Disclosures Delegated
Act.
Share of taxonomy-eligible/ineligible activities in total revenues at consolidated level
160
At the level of the entire group, the analysis of activities included in the numerator of KPU
revenues was carried out at the account level, and where there is insufficient analytics at the
account level, individual items and basic services were taken into account. For the revenues
related to activity 3.1, the information that 98% of transmission line construction projects in
Norway and 63% in Sweden are related to renewable energy sources was taken into account, and
revenues from transmission line construction projects were taken into account as eligible in this
percentage. For other countries, there was no information on the percentage, and projects from
other countries could not be included in the calculation of eligible or coordinated activities.
The Dalekovod Group generated revenue through taxonomically acceptable activities through
activities 3.1. Production of technologies for energy from renewable sources, which refers to the
construction of transmission lines to renewable energy sources with 20.8% (EUR 40.8 million)
compared to 0.2%, (EUR 0.3 million) in 2023 as well as through activity 6.15. Infrastructure for road
and public transport from 13.7% (EUR 27.0 million) compared to 11% (EUR 18.5 million) in 2023 to
activity 3.20. The production, installation and servicing of high-voltage, medium-voltage and low-voltage
electrical equipment for the transmission and distribution of electricity that significantly contributes to or
enables climate change mitigation accounts for 8.74% (EUR 17.1 million) compared to 5.99% (EUR
9.4 million) in 2023.
Capital expenditure (CapEx)
For the purpose of calculating the CapEx KPU, the companies put the numerator and denominator
in the ratio as set out in points 1.1.2.1 and 1.1.2.2. Annex I to the Disclosures Delegated Act.
0%
43%
57%
DALEKOVOD GROUP: TURNOVER PROPORTION OF
TAXONOMY -ELIGIBLE/ NON -ELIGIBLE ACTIVITIES
Turnover of environmentally
sustainable ac�vi�es (Taxonomy-
aligned) (A.1)
Turnover of Taxonomy-eligible but
not environmentally sustainable
ac�vi�es (not Taxonomy-aligned
ac�vi�es) (A.2)
Turnover of Taxonomy-non-eligible
ac�vi�es
161
Share of taxonomy-eligible/ineligible activities in CapEx at consolidated level
At the level of the entire group, the analysis of activities included in the numerator was done in
cooperation with the maintenance, production and project management department. Through a
business application, through which they monitor asset movements, the finance department
analyzed data at the level of the entire group, thus excluding mutual capital investments from
related companies. The denominator includes increases in tangible and intangible assets in 2022,
before depreciation and remeasurement, including increases resulting from revaluation and
impairment, for the relevant financial year and excluding changes in fair value (IAS 16 Property,
Plant and Equipment, paragraph 73(e)(i) and (iii); IAS 38 Intangible Assets, paragraph 118(e)(i); IAS 40
Investments in Real Estate, paragraph 79(d)(i) and (iii) (for the cost model) and the amount of increases
in long-term leases (IFRS 16 Leases, paragraph 53(h)).
For the analysis of data from 2024 a detailed approach to the matter was applied, where it was
determined that there is still a need for further improvement of the process in order to make the
data as good as possible in future reporting periods, i.e. that data on the distribution of capital
costs should not be estimated.
For the revenues related to activity 3.1, the information that 98% of transmission line construction
projects in the territory of Norway and 63% in the territory of Sweden are related to renewable
energy sources was taken into account, and on the basis of the revenues calculated in the manner
and revenues from activities 3.20 and 6.15 that use the same infrastructure for production and
construction, the CAPEX invested in this infrastructure was distributed. The calculation of CAPEX
0%
100%
DALEKOVOD GROUP: CAPEX PROPORTION OF TAXONOMY-
ELIGIBLE/ NON-ELIGIBLE ACTIVITIES
Turnover of environmentally
sustainable ac�vi�es
(Taxonomy-aligned) (A.1)
CapEx of Taxonomy-eligible
but not environmentally
sustainable ac�vi�es (not
Taxonomy-aligned ac�vi�es)
(A.2)
162
also takes into account the purchase of computers, which are the basic means for performing
these activities through management, project development, calculations related to design, statics
and the amount of materials needed for the implementation of activities. Other pieces of
equipment such as pumps used in production were also taken.
During 2024 the most important drivers of KPU in the recognized activities were investments in
passenger cars and trucks, and funds intended for production related to the construction of
transmission lines, electrical equipment and plants, tunnel equipment, and the construction of
new buildings.
The investments related to taxonomy-eligible activities identified above are part of the numerator
of the calculation of the KPU for CapEx, while the denominator is made up of all investments in
intangible, tangible assets, investments in real estate and right-of-use assets and relate to the
increase line as shown in the notes within the Group's financial statements.
As a result of the above-mentioned investments in taxonomic activities, the share of taxonomy-
eligible activities is 99.8% (EUR 7.1 million) compared to 63% (EUR 2.8 million) in 2023 of which the
largest part in capital expenditure relates to activity 6.5. Transport by motorcycles, passenger cars
and light commercial vehicles, or 37.0% (EUR 2.6 million) compared to 35.7% (EUR 1.6 million) in
2023 and activity 3.20. Production, installation and servicing of high-voltage, medium-voltage and low-
voltage electrical equipment for the transmission and distribution of electricity that significantly
contributes to climate change mitigation or that enables such a contribution in the amount of 12.04%
(EUR 0.8 million), activity 3.1. The production of renewable energy technologies contributed 28.7%
(EUR 2.0 million) and the activity 6.15. Road and public transport infrastructure – 19.0% (EUR 1.4
million) compared to 20.32% (EUR 0.9 million) in 2023.
The share of taxonomy ineligible activities in total capital expenditure is 0% compared to 16.00%
(EUR 0.7 million) in 2023.
Operating expenditure (OpEx)
For the purpose of calculating the OpEx-related KPU, the companies put the numerator and
denominator in the ratio as set out in points 1.1.3.1 and 1.1.3.2. Annex I to the Disclosures
Delegated Act.
163
Share of taxonomy-eligible/ineligible activities in operational expenditure at consolidated level
The analysis of activities that are included in the numerator was carried out at the level of the
account and the cost center, and where there is insufficient analytics at the account level, in
cooperation with the Maintenance Department and the Production Department, the analysis was
performed at the level of suppliers. To avoid showing data with related companies, analytics by
accounts were performed down to the vendor level.
Similarly to CapEx, a detailed approach was used, but in this case it was determined that there is a
need for further improvement in order to make the data as detailed as possible in the next
reporting period, so that the separation of costs by activity should not be estimated. During 2023
the most important driver of the KPU was operating expenditure related to costs related to freight
vehicles and the construction of infrastructure for road and public transport, as well as the
maintenance of buildings in the amount of less than 20% of the value of the building.
The operating costs identified above related to taxonomy-eligible activities are included in the
numerator of the calculation of the KPU for OpEx, while the denominator consists of all costs of
building renovation, maintenance and repair costs (including cleaning costs) and short-term
rentals.
Operating costs related to vehicles could be accurately determined with regard to the separation
of such costs, but on the other hand, due to the impossibility of separating operating costs by
activities that generate income on a production basis, an estimate was made. In the future, the
system will adapt to the classification according to taxonomic requirements as much as possible.
The share of taxonomically eligible activities in operating expenses at the level of the Dalekovod
Group is 75% (EUR 1.9 million) compared to 51% (EUR 1.2 million) in 2023.
0%
75%
25%
DALEKOVOD GROUP: OPEX PROPORTION OF TAXONOMY-ELIGIBLE/
NON-ELIGIBLE ACTIVITIES
Turnover of environmentally
sustainable ac�vi�es
(Taxonomy-aligned) (A.1)
OpEx of Taxonomy-eligible but
not environmentally
sustainable ac�vi�es (not
Taxonomy-aligned ac�vi�es)
(A.2)
164
Operating costs for eligible activities refer to activities 3.1. Manufacture of technologies for energy
from renewable sources 8.48% (EUR 0.2 million), 3.20 Manufacture, installation and servicing of high-
voltage, medium-voltage and low-voltage electrical equipment for the transmission and distribution of
electricity that significantly contributes to climate change mitigation or that enable such a contribution
with 3.56% (EUR 0.1 million), 6.5 Transport by motorcycles, passenger cars and light commercial
vehicles 6.22% (EUR 0.2 million), 6.6. Freight transport services 38.67% (EUR 1.0 million), on activities
6.15. Infrastructure for road and public transport 5.61% (EUR 0.15 million), and for activity 7.7
Purchase and ownership of buildings 12.97% (EUR 0.3 million).
The share of taxonomically ineligible activities in operating expenditure is 25% (EUR 0.3 million)
compared to 49% (EUR 1.2 million) in 2023.
165
Figure 4. Dalekovod Group: Share of taxonomically acceptable/ineligible activities in total revenues at the consolidated level, in accordance with Annex II.
Disclosures Delegated Act.
166
Figure 5. Dalekovod Group: Share of taxonomy-eligible/ineligible activities in total capital expenditure at the consolidated level, in accordance with
Annex II. Disclosures Delegated Act.
167
Figure 6. Dalekovod Group: Share of taxonomy-acceptable/ineligible activities in total operating expenditure at the consolidated level, in accordance
with Annex II. Disclosures Delegated Act.
KPMG
Independent
Auditor’s
Limited
Assurance
Report
on
the
Consolidated
Sustainability
Report
To
the
Shareholders
of
Dalekovod
d.d.
Limited
assurance
conclusion
We
have
performed
a
limited
assurance
engagement
on
whether
the
consolidated
Sustainability
Report
of
Dalekovod
d.d.
(‘the
Company”)
and
its
subsidiaries
(collectively,
“the
Group”),
included
in
the
Sustainability
Report
section
of
the
Group’s
Management
Report
as
of
and
for
the
year
ended
31
December
2024
(“the
Sustainability
Report”),
has
been
prepared
in
accordance
with
the
Croatian
Accounting
Law
(Official
Gazette
85/24,145/24)
(“the
Accounting
Law”).
Based
on
the
procedures
performed
and
evidence
obtained, nothing
has
come
to
our
attention
to
cause
us
to
believe
that
the
Group’s
Sustainability
Report
as
of
and
for
the
year
ended
31
December
2024
is
not
prepared,
in
all
material
respects,
in
accordance
with the
Accounting
Law,
including:
e
Compliance
with
the
European
Sustainability
Reporting
Standards
(“ESRS”),
including
that
the
process
carried
out
by
the
Group
to
identify
the
information
reported
in
the
Sustainability
Report
(“the
Process”)
is
in
accordance
with
the
description
set
out
in
the
IRO-1
Description
of
the
process
for
identification
and
assessment
of
material
impacts,
risks
and
opportunities
section
thereof;
and
e
Compliance
of
the
disclosures
in
the
Key
indicators
of
environmentally
sustainable
economic
activities
(EU
Taxonomy)
section
of
the
Sustainability
Report
with
the
reporting
requirements
of
Article
8
of
Regulation
(EU)
2020/852
(“the
Taxonomy
Regulation”)
Our
conclusion
on
the
Sustainability
Report
does
not
extend
to
any
other
information
that
accompanies
or
contains
the
Sustainability
Report
and
our
limited
assurance
report
thereon,
nor
to
any
information
within
the
Sustainability
Report
not
in
scope
of
our
assurance
engagement.
We
have
not
performed
any
assurance
procedures
as
part
of
this
engagement
with
respect
to
such
other
information.
However,
we
audited
the
Company’s
separate
and
the
Group’s
consolidated
financial
statements
as
of
and
for
the
year
ended
31
December
2024
prepared
in
accordance
with
International
Financial
Reporting
Standards
as
adopted
by
the
European
Union,
forming
part
of
the
other
information,
and
our
auditor’s
reports
thereon
are
also
included
with
the
other
information.
Basis
for
conclusion
We
conducted
our
limited
assurance
engagement
in
accordance
with
International
Standard
on
Assurance
Engagements
(ISAE)
3000
(Revised),
Assurance
Engagements
Other
Than
Audits
or
Reviews
of
Historical
Financial
Information,
issued
by
the
International
Auditing
and
Assurance
Standards
Board
(JAASB).
Our
responsibilities
under
this
standard
are
further
described
in
the
“Our
responsibilities™
section
of
our
report.
We
have
complied
with
the
independence
and
other
ethical
requirements
of
the
International
Code
of
Ethics
of
Professional
Accountants
(including
International
Independence
Standards)
issued
by
the
International
Ethics
Standards
Board
for
Accountants
(IESBA
code),
together
with
the
ethical
requirements
that
are
relevant
to
our
assurance
engagements
on
the
Sustainability
Reports
in
Croatia
Our
firm
applies
International
Standard
on
Quality
Management
(ISQM)
1,
Quality
Management
for
Firms
that
Perform
Audits
or
Reviews
of
Financial
Statements,
or
Other
Assurance
or
Related
Services
Engagements,
issued
by
the
IAASB.
This
standard
requires
the
firm
to
design,
implement
and
operate
a
system
of
quality
management,
including
policies
or
procedures
regarding
compliance
with ethical
requirements,
professional
standards
and
applicable
legal
and
regulatory
requirements.
We
believe
that
the
evidence
we
have
obtained
is
sufficient
and
appropriate
to
provide
a
basis
for
our
conclusion.
Other
matter
-
Comparative
information
Our
assurance
engagement
does
not
extend
to
comparative
information
in
respect
of
earlier
periods.
Our
conclusion
is
not
modified
in
respect
of
this
matter.
This
version
of
our limited
assurance
report
is
a
translation
from
the
original,
which
was
prepared
in
Croatian
language.
All
possible
care
has
been
taken
to
ensure
that
the
transiation
is
an
accurate
representation
of
the
original.
However,
in
all
matters
of
interpretation
of
information,
views
or
opinions,
the
ofiginal
Ianguage
version
of
our
auditreport
takes
precedence
over
this
translation.
168
Kbl
IndependentAuditor’s
Limited
Assurance
Report
on
the
Consolidated
Sustainability
Report
(continued)
Responsibilities
for
the
Sustainability
Report
The
Management
Board
of
the
Company
is
responsible
for
designing,
implementing
and
maintaining
a
process
to
identify
the
information
reported
in
the
Sustainability
Report
in
accordance
with
the
ESRS
and
for
disclosing
this
Process
in
the
IRO-1
Description
of
the
process
for
identification
and
assessment
of
material impacts,
risks
and
opportunities
section
of
the
Sustainability
Report.
This
responsibility
includes:
*
Understanding
the
context
in
which
the
Group's
activities
and
business
relationships
take
place
and
developing
an
understanding
of
its
affected
stakeholders;
«
Identifying
the
actual
and
potential
impacts
(both
negative
and
positive)
related
to
sustainability
matters,
as
well
as
risks
and
opportunities
that
affect,
or
could
reasonably
be
expected
to
affect,
the
Group's
financial position, financial
performance,
cash
flows,
access
to
finance
or
cost
of
capital
over
the short-,
medium-,
or
long-term;
e
Assessing
the
materiality
of
the
identified
impacts,
risks
and
opportunities
related
to
sustainability
matters
by
selecting
and
applying
appropriate
thresholds; and
«
Developing
methodologies
and
making
assumptions
that
are
reasonable
in
the
circumstances.
The
Management
Board
of
the
Company
is
further
responsible
for
the
preparation
of
the
Sustainability
Report
in
accordance
with
the
Accounting
Law,
including:
o
Compliance
with
the
ESRS;
e«
Preparing
the
disclosures
in
the
Key
indicators
of
environmentally
sustainable
economic
activities
(EU
taxonomy)
section
of
the
Sustainability
Report,
in
compliance
with
Article
8 of
the
Taxonomy
Regulation;
«
Designing,
implementing
and maintaining
such
internal
controls
that
the
Management
Board
of
the
Company
determines
are
necessary
to
enable
the
preparation
of
the
Sustainability
Report
such
that
it
is
free
from
material
misstatement,
whether
due
to
fraud
or
error;
and
*
Selecting and applying
appropriate
sustainability
reporting
methods
and
making
assumptions
and
estimates
about
individual
sustainability
disclosures
that
are
reasonable
in
the
circumstances.
Those
charged
with
governance
are
responsible
for
overseeing
the
reporting
process
for
the
Group’s
Sustainability
Report.
Inherent
limitations
in
preparing
the
Sustainability
Report
There
are
inherent
limitations
regarding
the
measurement
or
evaluation
of
the
sustainability
matters
presented
in
the
Sustainability
Report
subject
to
limited
assurance,
which
have
been
set
out
below:
*
Asdescribed
in
the
General
information
about
the
report
and
basis
of
preparation
section,
greenhouse
gas
emissions
quantification
is
subject
to
inherent
uncertainty
as
a
result
of
both
scientific
and
estimation
uncertainty;
*
Inreporting
forward-looking
information
in
accordance
with
the
ESRS,
the
Management
Board
is
required
to
prepare
the
forward-looking
information
on
the
basis
of
disclosed
assumptions
about
events
that
may
occur
in
the
future
and
possible
future
actions
by
the
Group.
The
actual
outcome
is
likely
to
be
different
since
anticipated events
frequently
do
not
occur
as
expected;
*
Indetermining
the
disclosures
in
the
Sustainability
Report,
the
Management
Board
interprets
undefined
legal
and
other
terms.
Undefined
legal
and
other
terms
may
be
interpreted
differently,
including
the
legal
conformity
of
their
interpretation
and,
accordingly,
are
subject
to
uncertainties.
This
version
of
our
limited
assurance
report
s
a
translation
from
the
original,
which
was
prepared
in
Croatian
language.
All
possible
care
has
been
taken
to
ensure
that
the
translation
s
an
accurate
representation
of
the
original.
However,
in
all
matters
of
interpretation
of
information,
views
or
opinions,
the
original
language
version
of
our
audit
report
takes
precedence
over
this
translation.
169
KPMG
Independent
Auditor’s
Limited
Assurance
Report
on
the
Consolidated
Sustainability
Report
(continued)
Our
responsibilities
Our objectives
are
to
plan
and
perform
the
assurance
engagement
to
obtain
limited
assurance
about
whether
the
Sustainability
Report
is
free
from
material
misstatement,
whether
due
to
fraud
or
error,
and
reporting
our
limited
assurance
conclusion
to
the
Company’s
shareholders.
Misstatements
can
arise
from
fraud
or
error
and
are
considered
material
if,
individually
or
in
the
aggregate,
they
could
reasonably
be
expected
to
influence
decisions
of
users taken
on
the
basis
of
the
Sustainability
Report
as
a
whole.
Our
responsibilities
in
relation
to
the
Process
for
reporting
the
Sustainability
Report,
include:
*
Obtaining
an
understanding
of
the
Process
but not
for
the
purpose
of
providing
a
conclusion
on
the
effectiveness
of
the
Process,
including
the
outcome
of
the
Process;
and
«
Designing
and
performing
procedures
to
evaluate
whether
the
Process
is
consistent
with
the
Group’s
description
of
its
Process,
as
disclosed
in
the
IRO-1
Description
of
the
process
for
identification
and
assessment
of
material impacts,
risks
and
opportunities
section.
Our
other
responsibilities
in
respect
of
the
Sustainability
Report
include
«
Obtaining
an
understanding
of
the
Group’s
control
environment,
processes
and
information
systems
relevant
to
the
preparation
of
the
Sustainability
Report
but
not
evaluating
the
design
of
particular
control
activities,
obtaining
evidence
about
their
implementation
or
testing
their
operating
effectiveness;
«
|dentifying
disclosures
where
material
misstatements
are
likely
to
arise,
whether
due
to
fraud
or
error,
and
«
Designing
and
performing
procedures
focused
on
disclosures
in
the
Sustainability
Report
where
material
misstatements
are
likely
to
arise.
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
control
Summary
of
the
work
we
performed
as the
basis
for
our
conclusion
A
limited
assurance
engagement
involves
performing
procedures
to
obtain
evidence
about
the
Sustainability
Report.
We
designed
and
performed
our
procedures
to
obtain
evidence
about
the
Sustainability
Report
that
is
sufficient
and
appropriate
to
provide
a
basis
for
our
conclusion.
The
nature,
timing
and
extent
of
our
procedures
depended
on
our
understanding
of
the
Sustainability
Report
and
other
engagement
circumstances,
including
the
identification
of
disclosures
where
material
misstatements
are
likely
to
arise,
whether
due
to
fraud
or
error,
in
the
Sustainability
Report.
We
exercised
professional
judgment
and
maintained
professional
skepticism
throughout
the
engagement.
In
conducting
our
limited
assurance
engagement,
with
respect
to
the
Process,
the
procedures
we
performed
included:
«
Obtaining
an
understanding
of
the
Process
by:
o
performing
inquiries
to
understand
the
sources
of
the
information
used
by
management
(including
stakeholder
engagement,
business
plans
and
strategy
documents);
and
o
inspecting
the
Group's
internal
documentation
of
its
Process.
«
Evaluating
whether
the
evidence
obtained
from
our
procedures
about
the
Process
was
consistent
with
the
description
of
the
Process
set
out
in
the
/RO-
1
Description
of
the
process
for
identification
and
assessment
of
material
impacts,
risks
and
opportunities
section
This
version
of
our
limited
assurance
report
s
a
translation
from
the original,
which
was
prepared
in
Croatian
language.
All
possible
care
has
been
taken
to
ensure
that
the
translationis
an
accurate
representationofthe
original.
However,
in
all
matters
ofinterpretation
of
information,
views
or
opinions,
the
original
language
version
of
our audit
report
takes
precedence
over
this
translation.
170
KPMG
Independent
Auditor’s
Limited
Assurance
Report
on the
Consolidated
Sustainability
Report
(continued)
Summary
of
the
work
we
performed
as
the
basis
for
our
conclusion
(continued)
In
conducting
our
limited
assurance
engagement
with
respect
to
the
Sustainability
Report,
the
procedures
we
performed
included:
«
Obtaining
an
understanding
of
the
Group’s
reporting
processes
relevant
to
the
preparation
of
its
Sustainability
Report
by
performing
inquiries
of
the
relevant
personnel
and
inspecting
the
Group's
internal
documentary
evidence;
*
Evaluating
whether
material
information
identified
by
the
Process
is
included
in
the
Sustainability
Report;
*
Evaluating
whether
the
structure
and
the
presentation
of
the
Sustainability
Report
is
in
accordance
with
the
ESRS;
e
Performing
inquiries
of
relevant
personnel
and
analytical
procedures
on
selected
disclosures
in
the
Sustainability
Report;
«
Performing
substantive
assurance
procedures
on
a
sample
basis
on
selected
disclosures
in
the
Sustainability
Report;
«
Obtaining
evidence
on
the
methods,
assumptions
and
data
for
developing
material
estimates
and
forward-looking
information
and
on
how
these
methods
were
applied;
*
Obtaining
an
understanding
of
the
process
to
identify
taxonomy-eligible
and
taxonomy-aligned
economic
activities
and
the
corresponding
disclosures
in
the
Sustainability
Report;
«
Evaluating
whether
the
standardized
reporting
templates
required
by
the
Taxonomy
Regulation
were
appropriately
used
to
present
the
key
performance
indicators;
e
Assessing
whether
the
taxonomy
disclosures
are
reconciled,
where
relevant,
with
the
Group's
consolidated
financial
statements;
and
«
Performing
substantive
assurance
procedures
on
selected
taxonomy
disclosures.
The
procedures
performed
in
a
limited
assurance
engagement
vary
in
nature
and
timing
from,
and
are
less
in
extent
than
for,
a
reasonable
assurance
engagement.
Consequently,
the
level
of
assurance
obtained
in
a
limited
assurance
engagement
is
substantially
lower
than
the
assurance
that
would
have
been
obtained
had
a
reasonable
assurance
engagement
been
performed.
L
nb
CondNy
dos
KPMG
Croatia
d.o.o.
za
reviziju
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April
2025
Croatian
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Auditors
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This
version
of
our
limited
assurance
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
our
audit
report
takes
precedence
over
this
translation.
m
172
REPORT ON THE IMPLEMENTATION OF THE CODE OF CORPORATE GOVERNANCE
Application of the principles of corporate governance
Given the fact that the Company's shares are listed on the Official Market of the Zagreb Stock
Exchange, the Company applies the Code of Corporate Governance of the Zagreb Stock Exchange
and the Croatian Financial Services Supervisory Agency (HANFA). The Code is available on the
websites of the Zagreb Stock Exchange (www.zse.hr) and HANFA (www.hanfa.hr).
In accordance with positive legal regulations, the Company has prepared a Statement on the
Application of the Corporate Governance Code for 2024 which confirms the operation and
development in accordance with good corporate governance practice in all business segments. The
Statement on the Application of the Code of Corporate Governance has been published on the
Company's website (www.dalekovod.hr) and on the websites of the Zagreb Stock Exchange
(www.zse.hr) and HANFA (www.hanfa.hr), whereby some corporate governance issues are defined
differently than provided for in the Code of Corporate Governance of the Zagreb Stock Exchange
Inc. and HANFA. Exceptions and derogations from the Code are given below.
In addition to the Code of Corporate Governance of the Zagreb Stock Exchange and HANFA, which
is in force, the Company also applies its own Corporate Governance Rules, thus improving business
transparency standards that are in line with the directives of the European Union. The Corporate
Governance Rules define the procedures for the work of supervisory boards, management and
other decision-making bodies and structures, and ensure the avoidance of conflicts of interest,
effective internal oversight and an effective accountability system.
The Company has adopted a Code of Ethics as the basic document that adopts and promotes the
organizational values of the Company and the Dalekovod Group as a whole, and promotes
corporate social responsibility. The company is a signatory of the Code of Ethics in Business,
initiated by the Croatian Chamber of Commerce. By accepting the Code of Ethics, the obligation to
act in accordance with the principles of responsibility, truthfulness, efficiency, transparency,
quality, acting in good faith, respecting good business practices towards business partners, the
business and social environment and our own employees has been accepted.
A description of the main elements of an internal control and risk management system is an
important part of the business, and their elements are set out below. The composition and work of
the Management Board and the Supervisory Board, the manner of operation of the General
Assembly and information on the Company's share holders are part of the Corporate Governance
Statement and are listed below. All of the above documents are available on the Society's website
(www.dalekovod.hr).
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The Company adheres to the recommendations of the Code, with the exception of those provisions
whose application is not practical or envisaged at a given time in view of the applicable legal
framework. The exceptions mentioned are as follows:
- The Supervisory Board did not give prior consent to the policy for managing conflicts of interest,
which is not available free of charge on the Company's website (Article 7 of the Code), since the
same is prescribed by the Code of Ethics, which is available on the Company's website. The adoption
of the Code of Conduct, which will define the policy for the management of conflicts of interest, is
scheduled for 2025.
- Members of the Management Board and the Supervisory Board do not have shares in companies
with which the company is in competition (Article 10 of the Code)
- The Supervisory Board has not formally set a target percentage of female members of the
Supervisory Board and the Management Board (Article 14 of the Supervisory Board). However, all
international and national standards around gender representation and equality are directly
implemented, and a formal goal is set for 2024. In 2024 the Sustainability Strategy was adopted,
which defined the percentage of female members of the Supervisory Board and the Management
Board in management positions.
- The report on the progress of the plan is published in part in the annual report within the meaning
of the provision of Article 14 of the Act. Code.
- When proposing candidates for the Supervisory Board to the General Assembly, the Company
makes available only the CVs of the candidates that are published on the website among the
materials for the General Assembly (Article 16 of the Act). Code).
- Not all the information specified in Article 16 of the Constitution of the Republic of Croatia is of
the Code are available free of charge on the Company's website (CV only).
- The materials for the General Assembly do not contain all the information listed in Article 17. of
the Code, but only a curriculum vitae.
- Not all information listed in Article 17 of the Constitution is true. of the Code are available free of
charge on the Company's website and in the event that an employee representative or other
member of the Supervisory Board who is not elected by the shareholders at the General Assembly
is appointed.
- The majority of the members of the Supervisory Board are not independent in accordance with
the definition of Appendix A of the Code because they are representatives of the majority
shareholder within the meaning of the provision of Article 22 of the Supervisory Board. Code.
- The Chairman or Deputy Chairman of the Supervisory Board are not independent because they
are representatives of the majority shareholder within the meaning of the provision of Article 22 of
the Supervisory Board. Code.
174
- The majority of the members of each Board of the Supervisory Board are not independent (as
defined in Appendix A of the Code) since some of the members of the Supervisory Board are
significant shareholders (Article 27 of the Supervisory Act). Code).
- The job description of the members of the Supervisory Board and/or the acts of the Company
stipulate the obligation to deliver all materials necessary for the session of the Supervisory Board
to their members no later than five (5) days before the session (Article 34 of the Supervisory Board).
of the Code) and not 7 days.
- The description of the tasks of the Supervisory Board and/or the acts of the Company stipulate
the obligation to submit all materials necessary for the session of the Supervisory Board to their
members no later than five (5) days before the session (Article 34 of the Supervisory Board Act). of
the Code) and not 7 days.
- The internal acts of the Company provide for the obligation to submit all materials necessary for
the meetings of the Supervisory Board and the Supervisory Board to their members no later than
five (5) days before the session (Article 34 of the Act). of the Code) and not 7 days.
- Obligations of members of the management board described in Article 47 of the Act. of the Code,
are regulated by the individual contracts of each member of the Management Board.
- The remuneration policy does not prescribe the right to shares of the members of the
Management Board or the right of retention in terms of the circumstances described in Article 53
of the Act. Code.
- There is no need for the remuneration policy or internal acts of the company to prohibit the
inclusion of variable elements or other elements related to business performance in the
remuneration of the Supervisory Board, since the Supervisory Board does not receive
remuneration, except for employee representatives, whose remuneration is fixed within the
meaning of the provision of Article 55 of the Supervisory Board. Code.
- The provision of non-audit services by the auditor is dealt with individually and is stated in the
opinion of the external auditor (Article 64 of the Act). Code).
- The Audit Committee did not approve the internal audit plan in the last 12 months, but approved
it in 2023 for work in 2024 within the meaning of the provision of Article 64 of the Audit Act. Code.
- The Audit Committee has not assessed the need for this function once in the last 12 months as
part of its assessment of the internal control system, since the Company has an internal audit
function within the meaning of the provision of Article 68 of the Internal Control Act. Code.
- The Company does not use the means of modern communication technology for participation and
voting at the General Assembly (Article 79 of the General Assembly Act). In practice, the current
voting method has been confirmed as the optimal solution, mostly due to a larger number of
shareholders with a smaller number of shares.
175
- Apart from personal presence or through proxy, shareholders may not exercise their right to vote
at the General Assembly in any other way, which is stated in the invitation to the General Assembly
within the meaning of the provision of Article 79 of the General Assembly Act. Code.
Fight against corruption and bribery
Members of management bodies, employees and business partners are familiar with anti-
corruption policies and procedures and respect the principles of the Code of Ethics in their business
and daily activities. On the international market, the Company enjoys the reputation of a loyal and
correct business partner, and there are no recorded cases of corruption at the level of the
Dalekovod Group.
The company has not made any financial or non-monetary contribution to political objectives,
directly or indirectly, to the State or the beneficiary. The Company promotes and implements fair
and transparent competitive relations in all operations, with all entities and in all places. No
behaviour contrary to the principle of freedom of competition and antitrust or monopolistic
practices has been recorded in the Dalekovod Group.
Organization of Corporate Governance
In accordance with the best practices, the Company strives for high standards of corporate
governance and business transparency as the only correct way of acting on which all business
activities in the Dalekovod Group are based. The corporate governance structure is based on a
dualistic system, consisting of the Supervisory Board and the Management Board of the Company.
With the General Assembly, in accordance with the Statute and the Companies Act, they represent
the three basic bodies of the Company.
General Assembly
The General Assembly is a body in which shareholders exercise their rights in the Company and in
which the will of the shareholders is expressed, which represents the will of the Company. The
General Assembly consists of all shareholders of the Company. The manner of operation of the
General Assembly, its powers, the rights of shareholders and the manner of their realization are
prescribed by the Company's Articles of Association, which is publicly available on the website
(www.dalekovod.hr).
The General Assembly is responsible for the election and dismissal of members of the Supervisory
Board, decides on the use of profits, grants discharge to members of the Management Board and
the Supervisory Board, appoints an auditor, decides on amendments to the Articles of Association,
increases and decreases of the share capital and other issues that are placed within its competence
by the provisions of the law.
In 2024 two sessions of the General Assembly were held. At the session held on 10 June 2024 all
decisions provided for in the agenda were adopted. The General Assembly adopted the Decision
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on granting discharge to the members of the Management Board and the Supervisory Board of the
Company, the Decision on covering losses for 2023 the Decision on the appointment of auditors
for 2024 the Decision on approving the Remuneration Policy for members of the Management
Board, approved the Report on Remuneration for the members of the Management Board and the
Supervisory Board for 2023 adopted the Decision on the amendment of the Company's Articles of
Association and the recall and election of members of the Company's Supervisory Board. At the
session held on 20 December 2024 the decision provided for in the agenda was adopted. The
General Assembly adopted the Decision on the election of members of the Supervisory Board. All
decisions from the General Assembly sessions were published in accordance with legal regulations
on the websites of the Company (www.dalekovod.hr), the Zagreb Stock Exchange and HANFA
together with the voting results.
Supervisory Board
In accordance with the applicable Code of Corporate Governance of the Zagreb Stock Exchange and
HANFA, the Supervisory Board is composed mostly of members who are not independent, i.e.
represent the majority shareholder of the Company.
The Supervisory Board has five members, four of whom are elected and dismissed by the General
Assembly, one representative is elected by the workers in accordance with the provisions of the
Labor Act.
The Supervisory Board is responsible for supervising the management of the Company's business,
representing the Company towards the Management Board and making decisions on matters that
do not fall within the competence of the General Assembly. The direct management of the
Company is not performed by the Supervisory Board, but directs the Management Board in making
strategic decisions and setting the management framework. The Company's Articles of Association
also give additional powers to the Supervisory Board, so it defines that certain types of activities
can be performed only with the prior consent of the Supervisory Board. At least four times a year
(if necessary, more often), the members of the Supervisory Board discuss the strategy and business
plan of the Company at their sessions. The Supervisory Board acts exclusively collectively as a
management and supervisory body, and subcommittees (committees) with special responsibilities
have been appointed.
The President of the Supervisory Board shall be elected from among themselves by the members
elected by the General Assembly. The Deputy President shall be elected from among themselves
by the members elected by the General Assembly. The term of office of the members of the
Supervisory Board shall be four years, and the same persons may be reappointed.
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According to the decision of the General Assembly of the Company of June 30, 2022, members of
the Supervisory Board (including the President and Deputy Chairman) are not entitled to
remuneration for their work, except for the member of the Supervisory Board who is a
representative of the workers, who is entitled to remuneration in the monthly gross amount of EUR
530.89.
The report on the remuneration of the Management Board and the Supervisory Board was
prepared in accordance with Article 272 of the ZTD and the adopted Remuneration Policy of the
Company and will be sent to the General Assembly for adoption.
Members of the Supervisory Board during 2024
Gordan Kolak - President
Josip Jurčević – Deputy President from 01/01/2024 to 18/06/2024
Dražen Buljić – Member
Josip Lasić – Member from 01/01/2024 to 18/06/2024 and from 19/06/2024 to 31/12/2024 Deputy
President
Božidar Poldrugač – member from 01/01/2024 to 18/06/2024
Damir Spudić – member from 01/01/2024 to 18/06/2024
Pavao Vujnovac – member from 01/01/2024 to 18/06/2024
Petar Bobek – member from 19/06/2024 to 31/12/2024
Ivan Paić – member since 19/06/2024
In 2024 56 meetings of the Supervisory Board were held. The quorum for the sessions of the
Supervisory Board shall be at least half of the total prescribed number of its members.
In 2024 all members participated in decision-making at all sessions. In case of physical disability,
absent members were involved in the work of the Supervisory Board via videoconference platform
or in writing, all in accordance with the Rules of Procedure of the Supervisory Board.
The Management Board and the Supervisory Board closely cooperate for the benefit of the
Company and the Dalekovod Group, through held sessions, but also through other communication
channels when there is a need for it. The Management Board regularly informed the Supervisory
Board about all major business events, business flow, revenues and expenses, and the general
condition of the Company and the Dalekovod Group.
Within the legally prescribed deadlines, the Management Board submitted quarterly, semi-annual
and annual written reports on operations to the Supervisory Board, to which the Supervisory Board
had no objections and which were unanimously adopted. In addition, the Management Board
informed the Supervisory Board about corporate strategy, planning, business events, risk
178
management, compliance, any deviations of business events from the original plans and estimates,
as well as about important business transactions involving the Company and the Dalekovod Group.
The Supervisory Board conducted a self-assessment of the profiles and competencies of the
members of the Supervisory Board and the members of its Committees. The self-assessment was
carried out by the Chairman of the Supervisory Board with the assistance of the relevant
Committees, without the involvement of an external auditor.
The Supervisory Board shall operate in an optimal number of five members so that its members, as
a whole, possess the knowledge, competence and professional experience necessary for the proper
performance of their tasks, taking into account the aspect of diversity. The evaluation of the
members of the Supervisory Board and its Committees confirmed that each individual makes an
effective contribution, demonstrating commitment to their role and dedicating time to performing
this duty.
Administrative support in the preparation of the Supervisory Board sessions is provided by the
Secretary of the Company in an efficient and timely manner. The Supervisory Board supports the
aspect of diversity, with, above all, the necessary expertise of candidates when proposing
appointment to the Supervisory Board of the Company.
The report on the supervision performed in the business year 2024 prepared for voting at the
General Assembly, contains the following:
- the manner in which and to what extent the Supervisory Board supervised the management of the
Company in the business year 2024
- the results of the examination of the annual financial statements as at 31 December 2024
- auditor's report,
- the results of the examination of the Management Board's report on the state of business in the
business year 2024
- the results of the examination of the report on relations with the parent and related companies.
Supervisory Board Committees
Within the Supervisory Board, there are three committees that support the work and activities of
the Supervisory Board: the Audit Committee, the Nomination and Remuneration Committee and
the Corporate Governance Committee. In all boards, all members are appointed from among the
members of the Supervisory Board.
179
Audit Committee
It analyses financial statements in detail, provides support to the Company's accounting and
establishes good and quality internal controls in the Company. It monitors the integrity of financial
information, and in particular the correctness and consistency of accounting methods used by the
Company and the Dalekovod Group, including the criteria for the consolidation of the financial
statements of the companies belonging to the Dalekovod Group. Also, 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 disclosing the main risks to which the Company is exposed, and
that they are appropriately managed.
In the period from 01/01/2024 to 31/12/2024 the Chairman of the Audit Committee was Josip Lasić,
and the members were Josip Jurčević and Damir Spudić, who were then replaced by Gordan Kolak
and Petar Bobek in June 2024. In 2024 1 meeting of the Audit Committee was held. All members of
the Audit Committee were present at the decision-making session. The session discussed and
decided, and based on that recommendations were made to the Supervisory Board, 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 unconsolidated annual financial statements for 2023 the
recommendations for the adoption of these reports, and the appointment of auditors for 2024.
The Audit Committee is independent in its work and most of the members of the Audit Committee
are experts in the field of accounting and auditing.
Nomination and Remuneration Committee
The Board is responsible, among other things, for discussing and proposing to the Supervisory Board
decisions on the appointment and election of members of the Management Board of the Company,
as well as the structure of their remuneration. The chairman of the Board is Gordan Kolak, and the
members are Josip Jurčević and Pavao Vujnovac, who were then replaced in June 2024 by Miki
Huljić and Ivan Paić. All members of the Board are members of the Supervisory Board. In 2024 2
sessions were held in which all members of the Committee participated.
Corporate Governance Committee
The task of the Board is to support the Supervisory Board in the implementation and improvement
of the corporate governance strategy in the Company and the Dalekovod Group. In the period from
01.01.2024 to 31.12.2024, the Chairman of the Committee is Josip Jurčević, who was replaced by
180
Miki Huljić in June 2024, and the members are Josip Lasić and Božidar Poldrugač who was replaced
by Petar Bobek in June 2024. All members of the Board are members of the Supervisory Board. In
2024, there were no meetings of the Committee.
Management Board
The role of the Management Board in managing the Company's affairs is regulated by the
Companies Act, the Articles of Association and the Company's internal regulations. 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.
The Management Board of the Company is the leading body that manages the entire business on
its own responsibility, and is appointed and recalled by the Supervisory Board. The scope of
activities of the members of the Management Board of the Company is determined according to
business areas, i.e. activities and processes. The Management Board is responsible for quality
business risk management, and at regular sessions it checks the economic, environmental and
social impacts of the Company and Dalekovod Group.
At regular sessions, the Supervisory Board assesses and evaluates the performance of the
Company's Management Board on the basis of business performance indicators and the
maintenance and building of the Company's positive reputation.
Members of the Management Board, through the Assemblies and other adopted rules, coordinate,
direct, supervise and monitor the work in the subsidiaries of the Dalekovod Group. Members of the
Management Board of the Company do not receive remuneration for their work in the bodies of
the subsidiaries of the Dalekovod Group.
The Supervisory Board assessed that the Management Board and the Supervisory Board
cooperated effectively in the interest of the Company in 2024, through regular contact. The
Management Board duly informed the Supervisory Board about all major business events, the
course of business, revenues and expenses, and the general condition of the Company. The
Management Board regularly submitted quarterly, semi-annual and annual written reports on
operations to the Supervisory Board, to which the Supervisory Board had no objections and which
were unanimously adopted. The Management Board regularly informs the Supervisory Board
about corporate strategy, planning, business events, risk management, compliance, any deviations
of business events from the original plans, as well as important business transactions involving the
Company and the Dalekovod Group. The Management Board regularly submits reports prescribed
by law to the Supervisory Board, and between sessions, the Management Board duly informs the
Supervisory Board of important events related to the Company's operations.
Individual self-assessment of the work of the Management Board is an integral part of the annual
process of performance management and performance assessment of Management Board
members. In addition, in accordance with the ZTD, the General Assembly approves the manner in
181
which the Management Board conducted the Company's operations through the granting of
discharge for the previous business year.
According to the Statute, the Management Board may consist of from one to a maximum of five
members. The convocation on 31.12.2024 has two members. The term of office of the members of
the Management Board lasts up to five years, with the possibility of reappointment without limiting
the number of mandates. Each member of the Management Board conducts affairs within his scope
of activity independently and on his own responsibility with the attention of an orderly and
conscientious businessman and makes decisions exclusively in the interest of the Company. When
decisions are made on key issues of business policy or on issues that encroach on the scope of other
members of the Management Board, the Management Board member is obliged to submit them
to the entire Management Board for decision-making.
The contract on the performance of the duties of a member of the Management Board defines the
rights and obligations of the members of the Management Board on the basis of performing the
function of a member of the Management Board. The report on the remuneration of the
Management Board and the Supervisory Board contains information on the amount of
remuneration of the members of the Management Board and was prepared in accordance with
Article 272 of the ZTD and the adopted Remuneration Policy of the Company and will be sent to
the General Assembly for adoption.
Members of the Management Board who held this position during 2024:
Tomislav Rosandić, President of the Management Board in the period from 01/01/2024 to 31/03/2024,
Eugen Paić-Karega, Member of the Management Board in the period from 01/01/2024 to 31/03/2024,
President of the Management Board in the period from 01/04/2024 to 31/12/2024/
Tvrtko Zlopaša, Member of the Management Board in the period from 01/01/2024 to 31/12/2024
In 2024, the Management Board of the Company held 97 sessions. All members of the Management
Board were present at all sessions. In the event of physical disability, the members of the
Management Board participated in the sessions via video call and actively participated in the work
of the Management Board and decision-making.
Interna revizija
The Company has engaged the Internal Audit Department of Končar – Electrical Industry Inc. for
the purpose of performing the function of independent audit and control in the Company. Internal
audit informs the Management Board, the Supervisory Board and the Audit Committee through
comprehensive reports on the audit (findings and suggestions for improvement). The Internal Audit
Charter defines the framework of work and the main principles used in the work of internal audit
in the Company and the Dalekovod Group.
Internal audit is responsible for assessing the level of risk management in business processes,
auditing the efficiency of the internal control system, with the purpose of improving risk
management and compliance with procedures, examining and analyzing the compliance of existing
182
business systems with the adopted policies, plans, procedures, laws and rules that can have a
significant impact on business reports.
It is responsible for recommending preventive measures in the areas of financial reporting,
compliance, operations and control in order to eliminate risks and possible deficiencies that could
lead to process inefficiencies or fraudulent procedures. The Internal Audit informs the Management
Board, the Audit Committee and the Supervisory Board about its work and audit plan. Findings and
recommendations help management to improve processes, preventively eliminate potential risk or
reduce risk to an acceptable level.
In 2024, audits were carried out or completed in the areas of the reporting process, procurement
and project implementation. The Review of Findings and Recommendations presents in more detail
all findings and recommendations for all audits performed, with deadlines and status. The reports
on the audits carried out were adopted by the Audit Committee.
Employees
An important determinant of the Company's strategy is the creation of a knowledge company based
on total intellectual capital. Due to the increased demands for competitiveness, professional
development of employees and effective human resource management are among the priorities of
the organization. By regulating employment relations and internal organization, the Company and
the companies of the Dalekovod Group comply with the regulations in force, collective and
individual agreements, and protect human and civil rights, dignity and reputation of each employee.
The Company organizes its business in such a way that it respects and applies the provisions of the
Constitution, laws and other regulations, bylaws and internal acts of the Company in its work. It
continuously informs all employees of all relevant provisions and rules concerning their rights and
obligations at work, fights against all forms of irregularities and strives to prevent all forms of
irregularities.
The company promotes the equality of all workers, regardless of gender, age, nationality, ethnic
origin, race, religion, language, social and economic status, sexual orientation, membership in
political and other organizations.
During the reporting period, no cases of discrimination based on race, colour, sex, religion, political
opinion, national or social origin were recorded. According to the Collective Agreement, the
employer is obliged to protect the dignity of the worker during the performance of work and to
provide him with working conditions in which he will not be exposed to harassment or sexual
harassment by the employer, superiors, associates or other persons with whom he regularly comes
into contact during the performance of work.
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
Accounting policies and notes form an integral part of these financial statements
190
| (all amounts are expressed in thousands of EUR) | Note | Dalekovod Group2024 | 2023 | Dalekovod d.d.2024 | 2023 |
| Sales revenue | 6 | ||||
| Other income | 7 | ||||
| Change in work in progress and finished goods | ( | ( | |||
| Cost of trade goods sold | ( | ( | ( | ( | |
| Cost of materials andservices | 8 | ( | ( | ( | ( |
| Employee benefits | 9 | ( | ( | ( | ( |
| Depreciation and amortisation | 15-17 | ( | ( | ( | ( |
| Other operating expenses | 10 | ( | ( | ( | ( |
| Impairment loss on trade receivables and other financial assets | 11 | ( | ( | ( | ( |
| Operating profit/(loss) | ( | ( | |||
| Finance income | 12 | ||||
| Finance costs | 12 | ( | ( | ( | ( |
| ( | ( | ||||
| Profit / (loss) before tax | ( | ( | |||
| Income tax | 13 | ( | ( | ( | ( |
| Net profit / (loss) from continuing operations | ( | ( | |||
| Net profit / (loss) from discontinued operations | ( | ( | |||
| Net profit / (loss) | ( | ( | |||
| Net profit / (loss)attributable to:Owners of the Company | ( | ( | |||
| Net profit / (loss) | ( | ( | |||
| Basic and diluted earningsper share (in EUR) | 14 | ( |
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
Accounting policies and notes form an integral part of these financial statements
191
| (all amounts are expressed in | Note | Dalekovod Group2024 | 2023 | Dalekovod d.d.2024 | 2023 |
| thousands of EUR) | |||||
| Net profit / (loss) | ( | ( | |||
| Other comprehensive income / (loss): | |||||
| Foreign exchange differences | |||||
| Other | ( | ||||
| Total other comprehensive income / (loss) | ( | ||||
| Total comprehensive income / (loss) | ( | ( | |||
| Comprehensive income / (loss) attributable to:Owners of the Company | ( | ( | |||
| Total comprehensive income / (loss) | ( | ( |
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITION
ON 31 DECEMBER 2024
Accounting policies and notes form an integral part of these financial statements
192
| (all amounts are expressed in | Note | Dalekovod Group2024 | 2023 | Dalekovod d.d.2024 | 2023 |
| thousands of EUR) | |||||
| ASSETS | |||||
| Intangible assets | 15 | ||||
| Property, plant and equipment | 16 | ||||
| Investment property | 17 | ||||
| Investments in subsidiaries | 19 | ||||
| Investments in associates | 20 | ||||
| Loans and receivables | 22 | ||||
| Non-current assets | |||||
| Inventories | 23 | ||||
| Trade and other receivables | 24 | ||||
| Current tax assets | |||||
| Cash and cash equivalents | 25 | ||||
| Assets held for sale | |||||
| Current assets | |||||
| Total assets |
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITION (continued)
ON 31 DECEMBER 2024.
Accounting policies and notes form an integral part of these financial statements
193
| (all amounts are expressed in | Dalekovod Group | Dalekovod d.d. | |||
| thousands of EUR) | Note | 2024 | 2023 | 2024 | 2023 |
| EQUITY AND LIABILITIES | |||||
| Share capital | 26 | ||||
| Capital reserves | |||||
| Legal reserves | 26 | ||||
| Treasury shares | 26 | ( | ( | ( | ( |
| Statutory and other reserves | 26 | ||||
| Revaluation reserves | 26 | ||||
| Translation reserves | ( | ( | |||
| Retained earnings/(accumulated loss) | ( | ( | ( | ||
| Equity | |||||
| Total equity | |||||
| Borrowings | 27 | ||||
| Provisions | 29 | ||||
| Deferred tax liabilities | 13 | ||||
| Non-current liabilities | |||||
| Borrowings | 27 | ||||
| Provisions | 29 | ||||
| Trade and other payables | 28 | ||||
| Current tax liabilies | |||||
| Liabilities held for sale | |||||
| 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 2024
Accounting policies and notes form an integral part of these financial statements
194
Group
| Retained | ||||||||||
| (all amounts are expressed in thousands of EUR) | Note | Sharecapital | Capital reserves | Legal reserves | Treasury shares | Statutory and other reserves | Revaluation reserves | Translation reserve | earnings/(accumulated loss) | Total |
| As of January 1, 2023 | ( | ( | ||||||||
| Net profit/(loss) | ( | ( | ||||||||
| Other comprehensive income/(loss) | ( | ( | ||||||||
| Total comprehensive income/(loss) | ( | ( | ( | |||||||
| Other changes in equity | ( | ( | ||||||||
| Share capital decrease | 30 | ( | ||||||||
| Total transactions with owners | ( | |||||||||
| As of December 31, 2023 | ( | ( | ( | |||||||
| Net profit/(loss) | ||||||||||
| Other comprehensive income/(loss) | ||||||||||
| Total comprehensive income/(loss) | ||||||||||
| Total transactions with owners | ||||||||||
| As of December 31, 2024 | ( | ( |
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY (continued)
FOR THE YEAR ENDED 31 DECEMBER 2024
Accounting policies and notes form an integral part of these financial statements
195
Company
| (all amounts are expressed in thousands of EUR) | Note | Sharecapital | Capital reserves | Treasuryshares | Statutory and other reserves | Revaluationreserves | Retained earnings /(accumulated loss) | Total |
| As of January 1, 2023 | ( | ( | ||||||
| Net profit/(loss) | ( | ( | ||||||
| Total comprehensive income/(loss) | ( | ( | ||||||
| Reduction in share capital | 30 | ( | ||||||
| Total transactions with owners | ( | |||||||
| As of December 31, 2023 | ( | ( | ||||||
| Net profit/(loss) | ||||||||
| Total comprehensive income | ||||||||
| Total transactions with owners | ||||||||
| As of December 31, 2024 | ( | ( |
DALEKOVOD d.d.
CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Accounting policies and notes form an integral part of these financial statements
196
| Note | Dalekovod G2024 | roup2023 | Dalekovod d.d.2024 | 2023 | |
| (all amounts are expressed in thousands ofEUR) | |||||
| Cash flows from operating activities | |||||
| Cash receipts from customers | |||||
| Cash receipts from insurance compensation | |||||
| Cash receipts from tax refunds | |||||
| Cash outflows to suppliers | ( | ( | ( | ( | |
| Cash outflows for employees | ( | ( | ( | ( | |
| Cash outflows for insurance compensation | ( | ( | ( | ( | |
| Cash outflows for taxes | ( | ( | ( | ( | |
| Other cash outflows | ( | ( | ( | ( | |
| Net cash generated from operating activities | |||||
| Interest paid | ( | ( | ( | ( | |
| Income tax paid | ( | ( | ( | ( | |
| Net cash flows from operatiing activities | |||||
| Cash flows from investing activities | |||||
| Cash receipts from sale of property, plant and equipment and intangible assets | |||||
| Cash receipts from collection of receivables from sale of shares in subsidiaries | | ||||
| Interest received | |||||
| Dividends received | |||||
| Cash receipts from return of term deposits | |||||
| Cash receipts from other investing activities | | ||||
| Net cash outflows for purchase ofproperty, plant and equipment and intangible assets | ( | ( | ( | ( | |
| Cash otflows related to term deposits and other investing activities | ( | ( | ( | ( | |
| Net cash outflows used in investingactivities | ( | ( | ( | ( |
DALEKOVOD d.d.
CONSOLIDATED AND UNCONSOLIDATED STATEMENT OF CASH FLOWS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2024
197
| (all amounts stated in thousands of EUR) | Note | Dalekovod G2024 | roup2023 | Dalekovod d2024 | .d.2023 |
| Cash flows from financing activities | |||||
| Cash receipts from borrowings and loans | |||||
| Other cash receipts from financing activities | |||||
| Cash outflows for repayment of borrowings | ( | ( | ( | ( | |
| Other cash outflows from financing activities | ( | ( | ( | ( | |
| Net cash flows from/(used in) financing activities | ( | ( | |||
| Net (decrease)/increase in cash flows | ( | ( | |||
| Cash and cash equivalents at the beginning of the year | |||||
| Cash and cash equivalents at the end of theyear | 25 |
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
198
NOTE 1 – GENERAL INFORMATION
At 31 December Dalekovod Group (the Group) comprises of the parent company Dalekovod d.d. and 13
subsidiaries owned by the parent company.
Dalekovod d.d. (hereinafter the Company) was incorporated in compliance with the laws and regulations
of the Republic of Croatia Zagreb , Marijana Čavića 4 street .
Company’s shares are listed on the Zagreb Stock Exchange.
The Company’s principal activity is engineering, production, construction and installation of electric
Members of the Supervisory Board:
Gordan Kolak President of the Supervisory Board
Josip Jurčević Vice president of the Supervisory Board from 01/01/2024 until 18/06/2024
Josip Lasić
Member of the Supervisory Board from 01/01/2024 until 18/06/2024; Vice
President from 19/6/2024 until 31/12/2024
Dražen Buljić Member of the Supervisory Board
Božidar Poldrugač Member of the Supervisory Board from 01/01/2024 until 18/06/2024
Damir Spudić Member of the Supervisory Board from 01/01/2024 until 18/06/2024
Pavao Vujnovac Member of the Supervisory Board from 01/01/2024 until 18/06/2024
Miki Huljić Member of the Supervisory Board from 01/01/2025
Mario Radaković Member of the Supervisory Board from 01/01/2025,
Vice president of the Supervisory Board from 02/01/2025
Members of the
Management
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
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2024
199
NOTE 2 – INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out
below. These policies are applicable to both the Group and to the Company and they have been
2.1 Basis of preparation
The consolidated financial statements of the Group and the separate financial statements of the
Company have been prepared in accordance with the 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 income statement and equity
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates and assessments throughout the process of application of accounting policies of
the Group and the Company. 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.
During 2024 the Company and the Group decided to change the accounting policy and present the
items in the cash flow statement using the direct method instead of the indirect method in order to
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
200
NOTE 2 – INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 Consolidation
(a) Subsidiaries
In the separate financial statements, the Company states 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 de-
consolidated 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 book value recognised in profit or loss. The fair value is
the initial book value 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 statement where
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
201
NOTE 2 – INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (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 profit or loss
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
book value 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.
2.3 Foreign currencies
(a) Foreign currency 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
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
202
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision-maker, responsible for allocating
resources and assessing performance of the operating segments, has been identified as the
2.5 Property, plant and equipment
Building, plants and equipment 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 derecognized. 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 tangible asset is available and ready to use. Depreciation is calculated over their estimated
useful lives, as follows:
Useful live in years:
Buildings
20 – 40
Equipment
5 – 10
Plants
25
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 assessment (usually every three years) performed 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
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
203
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.6 Property investments
Investments in property, principally office buildings and land that are held for long-term rental yields
or increase of their value. Investments in property are 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 they are classified
within current assets.
Investments in property are carried at historical cost less accumulated depreciation and provision for
impairment, if necessary. Depreciation for buildings is calculated using the straight-line method to
allocate cost over estimated life cycle (20 to 40 years).
Subsequent costs are capitalised only when it is probable that future economic benefits associated
with it will benefit to the Group and the cost can be measured reliably. All other repairs and
maintenance costs are charged to the income statement when incurred. If the Group starts using the
property intended for sale, it is reclassified to property, plant and equipment, and it book value at the
2.7 Intangible assets
Intangible assets consist mainly of the right of use and software and are capitalized on the basis of the
costs incurred to bring to use the specific software. These costs are amortised during their useful lives
2.8 Impairment of non-financial assets
Assets that have an indefinite useful life (such as land or goodwill) which are not subject to
amortisation are tested annually for impairment. Assets that are subject to amortisation and
depreciation are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
204
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.9 Financial instruments
2.9.1 Financial assets
(a) Recognition and initial measurement
Trade receivables are initially recognised when they are originated. All other financial assets are
initially recognised when the Group becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) is initially
measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to
its acquisition or issue. A trade receivable without a significant financing component is initially
measured at the transaction price.
(b) Classification and subsequent measurement
On initial recognition, a financial asset is classified as measured at:
- amortised cost;
- FVOCI (fair value through other comprehensive income) – debt investment;
- FVOCI – equity investment;
- or FVTPL (fair value through profit or loss).
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes
its business model for managing financial assets, in which case all affected financial assets are
reclassified on the first day of the first reporting period following the change of the business model.
Financial assets are measured at amortised cost if they meet both of the following conditions and are
not designated as at FVTPL:
- they are held within a business model whose objective is to collect contractual cash flows; and
- their contractual terms on specified dates lead to cash flows that are solely payments of
principal amount 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 choice 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 the Company do not have any recognized amounts of assets
measured at FVTPL.
The main categories of financial assets recognized by the company are cash and cash equivalents, trade
receivables and loans, all of which are measured at amortized cost, with receivables and loans held in
the hold-to-collect business model.
Assessment of whether the contractual cash flows represent solely principal and interest payments
For the purpose of this assessment, 'principal' is defined as the fair value of the financial asset at initial
recognition. 'Interest' is defined as a consideration for the time value of money, the credit risk
associated with the time period over which the remaining principal is repaid, and other basic risks and
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
205
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.9 Financial instruments (continued)
2.9.1 Financial assets (continued)
(b) Classification and subsequent measurement (continued)
Assessment whether the contractual cash flows represent solely principal and interest payments
(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 financial assets contain a contractual condition that could change the timing or the
amount of contractual cash flows in such a way that the basic criterion would not be met. In making
of this assessment, the Group considers:
- contigent events that could change the amount or timing of cash flows;
- terms that may influence 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 principal and interest payments’ 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 the
Company apply with respect to subsequent measurement and recognition of gains and losses of the
main financial asset category recognized in their financial statements:
Financial assets
at amor�zed
cost
These assets are subsequently measured at amor�zed cost using the effec�ve
interest method. The amor�zed cost is reduced by impairment losses. Interest
income, foreign exchange gains and losses and impairment losses are recognized in
profit or loss. The gain or loss on de-recogni�on is recognised in profit or loss.
(c) De-recognition
The Group de-recognises a financial asset when the contractual rights to the cash flows from that
financial asset expire or when the rights to the contractual cash flows are transferred in a transaction
in which substantially all the risks and rewards of ownership of the financial asset are transferred or in
which the Group neither transfers nor retains the risks and rewards of ownership but 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
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
206
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.9 Financial instruments (continued)
2.9.2 Financial liabilities
(a) Recognition and initial measurement
Debt securities issued are initially recognized at the time of origination. All other financial assets are
initially recognized when the Group becomes a party to the contractual provision of the financial
instrument.
A financial liability is initially measured at fair value plus, if it is an instrument not carried at FVTPL,
transaction costs that are directly attributable to the acquisition or issue of the instrument.
(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 de-recognition is
also recognised in profit or loss. Any gain or loss at de-recognition is also recognised in income
statement.
(c) De-recognition
The Group derecognises a financial liability when its contractual obligations are discharged or
cancelled, or expire. The Company also derecognizes a financial liability when the contractual terms
are modified and the cash flow of the modified liability is significantly different from the initial one,
with the new financial liability based on the modified terms being recognized at fair value.
When a financial liability is derecognized, the difference between the carrying amount and the
consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in
the income statement.
2.9.3 Offsetting
Financial assets and financial liabilities are offset and the net amount shown in the statement of
financial position when, and only when, the Group currently has a legally enforceable right to set off
the amounts and intends either to settle them on a net basis or to realize the asset and settle the
liability simultaneously.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
207
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.9 Financial instruments (continued)
2.9.4 Impairment of derivative financial assets
Recognition of loss allowaances
The Group recognizes loss allowances for expected credit losses (ECLs) on:
- financial assets measured at amortized cost;
- investments in debt securities measured at fair value through other comprehensive income;
and
- contract assets.
The Group recognizes provisions for losses equal to lifetime ECLs, except in the following cases in which
it measures them at 12-month ECLs:
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank accounts 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 supporting information
that are 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 includes 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
- financial assets are 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 cash flows due to the entity in accordance with
the contract and cash flows that the Group expects to receive).
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
208
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.9 Financial instruments (continued)
2.9.4 Impairment of 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 reorganization; or
- The disappearance of an active market for a security because of financial difficulties.
Presentation of allowance for ECL in the statament of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross book
value 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 book value 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 book value 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 no significant
2.10 Leases
The Group and the Company are the Lessee
At the 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 amendment 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
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
209
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.10 Leases (continued)
The Group and the Company are the 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 from the lease commencement date over the useful life of the
underlying asset, which is determined on the same basis as those for 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 the Company’s marginal borrowing rate. Generally, the Group
and the Company use its marginal borrowing rate as the discount rate.
The Group and the Company determine its marginal 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 expected price under a purchase option that the Group and the Company are reasonably
certain to exercise, lease payments in an optional renewal period if the Group and the
Company are reasonably certain to exercise an extension option, and penalties for early
termination of a lease unless the Group and the Company are reasonably certain not to
terminate early.
The lease liability is measured at amortised cost using the effective interest rate method. It is
remeasured when there are changes in future lease payments due to changes in index or rates, if there
is a change in the estimate of the expected number of payments under residual value guarantees, if
the Group or the Company change its estimates of whether to exercise the purchase, extension or
termination option, or if there are changes in lease payments that are fixed in substance.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the book
value of the right-of-use asset, or is recorded in income statement if the book value 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
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
210
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.10 Leases (continued)
The Group and the Company are the Lessee (continued)
Short-term leases and leases of low-value assets
The Group and the 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.
The Group and the Company lease certain property, plant and equipment. Leases of property, plant
and equipment in which the Group or the Company assumes substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalized at the inception of the lease
at the lower of the fair value of the leased property or the present value of the minimum lease
payments. Each lease payment is allocated between the liability and finance expense to achieve a
constant rate on the remaining financial position. The interest component of the finance expense is
charged to the income statement over the lease term. Property, plant and equipment acquired under
finance leases are depreciated over the shorter of the useful life of the asset or the lease term.
Leases in which the Group or the Company does not bear a significant share of the risks and rewards
of ownership are classified as operating leases. Payments under operating leases are recognised in the
income statement on a straight-line basis over the lease term.
The Group and the Company are the Lessor
The accounting policy applicable to the Group and the 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 the 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
2.11 Inventories
Inventories of raw materials and spare parts are stated at the lower of cost and net realizable value.
Cost is determined using the weighted average cost method. Net realizable value represents the
estimated selling price in the ordinary course of business less variable selling expenses.
The cost of work in progress and finished goods include raw materials, direct labour, other direct costs
and an appropriate portion of production overheads (based on normal regular production capacity).
2.12 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, deposits held at call with banks and other short-
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
211
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.13 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are reported net of related transaction costs and income tax.
The consideration paid for the purchase of treasury shares, including any directly attributable
transaction costs (net of income tax), reduces the equity attributable to the Company's shareholders
until the shares are withdrawn or reissued. When such shares are subsequently reissued, any
consideration received, net of any directly attributable transaction costs and the related income tax
2.14 Borrowings
Borrowings are recognised initially at fair value, less transaction costs incurred. In future periods,
borrowings are 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. Borrowing that will be settled solely by the sale of
foreclosed assets is measured in accordance with the estimated fair value of the foreclosed assets.
Borrowing fees are recognised as transaction costs of the loan if it is probable that some or all of the
loan will be drawn down.
Borrowings are classified as current liabilities unless the Group or the Company has an unconditional
2.15 Income tax
The tax expense for the year comprises of current and deferred income tax. Tax is recognized in the
income statement, except to the extent that it relates to items recognized in other comprehensive
income or directly in equity. In that case, the tax is recognised in the statament of other comprehensive
income or directly in equity, respectively.
Current tax expense is calculated based on the tax laws that are in force or partially applied at the
reporting date in the countries in which the subsidiaries and the Company operate and generate
taxable profit. The basis for calculating income tax is the difference between income and expenses
determined in accordance with the Law. The management periodically assesses individual items in tax
returns with regard to situations in which applicable tax provisions are subject to interpretation and
considers the formation of provisions, where appropriate, based on the expected amount to be paid
2.16 Deferred income tax
The amount of deferred tax is calculated using the balance sheet liability method on temporary
differences between the tax bases of assets and liabilities and their book value in the financial
statements. However, deferred tax is not recognized if it arises from the initial recognition of assets or
liabilities in a transaction that is not a business combination and that at the time of the transaction
affects neither accounting profit nor taxable profit (tax loss). Deferred tax assets and liabilities are
measured at the tax rates that are expected to apply in the period when the asset is recovered or the
liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by
the reporting date.
Deferred tax assets are recognized to the extent of probable future taxable profit being utilized for
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
212
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.16 Deferred income tax (continued)
The amount of deferred income tax is calculated on temporary differences arising from investments in
subsidiaries and associated companies, except when the timing of the cancellation of temporary
differences is controlled by the Group, and there is a probability that the temporary difference will not
be cancelled in the foreseeable future.
Deferred tax assets and liabilities are netted in the case when there is a legally enforceable right to
offset current tax assets and current tax liabilities, and when deferred tax assets and liabilities relate
to income taxes imposed by the same tax authority on the same or different tax subject and when
2.17 Supplier liabilities and other liabilities
Supplier and other liabilities are recognised initially at fair value and subsequently measured at
2.18 Employee benefits
(a) Retirement obligations and other post-retirement obligations
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 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 termination of employment 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 severance 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
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
213
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (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 number of provisions increases in each period to reflect
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 goods or services 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 'stage of
completion' is measured using the cost input method by comparing contract costs to the reporting
date with the total estimated costs for each contract. In determining the 'stage of completion', all costs
incurred during the year that relate to future contract activities are excluded and are reported as
inventories, advances or other assets, depending on their nature.
For all contracts in progress where costs incurred and recognised profits (net of recognised losses)
exceed the amounts progressively charged, the Group and the Company present the gross amount due
from customers as assets. Amounts progressively charged but not paid by customers and amounts
retained are presented as trade and other receivables.
For all contracts in progress where the amounts progressively charged exceed the costs incurred and
the profits recognised (net of any losses recognised), the Group presents the gross amount as a liability
towards the customers.
As soon as a loss on a construction contract is identified and can be measured reliably, the Company
and the Group create a provision for expected losses until the end of the contract
. The loss on a
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
214
NOTE 2 - INFORMATION ON SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.20 Revenue recognition (continued)
(b) Revenue from the sale of finished goods and merchandise
Revenue from the sale of finished goods and merchandise is recognized when the Group and the
Company deliver goods to the customer, when the customer accepts the delivered goods and
merchandise, and when the possibility to collect receivables is reasonably certain. Revenue is
recognised in amounts net of value added tax, estimated returns, rebates and trade discounts.
(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. The even unwinding of the discount in future periods is recognized as interest income.
Interest income on impaired loans is recognized using the original effective interest rate method.
(d) Revenue from dividends
2.21 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the financial
statements in the period in which the dividends are approved by the General Assembly of the
2.22 Earnings per share
Earnings per share is determined by dividing the profit or loss attributable to owners of the Company
2.23 Value added tax
The Tax Authorities require the settlement of VAT on a net basis. VAT related to sales and purchases
is recognised and disclosed in the balance sheet on a net basis. Where a provision has been made for
impairment of receivables, impairment loss is recorded for the gross amount of the debtor, including
2.24 Assets held for sale
Fixed assets, classified as held for sale if their carrying value, will be largely compensated through sale
rather than through its continuing use; if these assets are available for immediate sale in their existing
state under conditions which are frequent and common for sale of such assets, and if the sale is
probable.
Assets held for sale are stated at the lower of net book value and fair value less cost to sell. Loss on
impairment from reduction to fair value less cost to sell, is charged to profit or loss.
Investments in associates and joint ventures that meet the criteria for classification as assets held for
sale at a certain time ceased to be measured using the equity method and are measured at lower of
NOTE 3 – FINANCIAL RISK MANAGEMENT
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
215
3.1 Financial risk factors
The activities undertaken by the Group and the Company expose them to various financial risks:
market risk (including currency risk and cash flow interest rate risk), price risk, credit risk, and liquidity
risk. While the Group and the Company do not have a formal risk management program, overall risk
management is handled by the Company's Finance Department.
(a) Market Risk
(i) Currency Risk
Revenue from foreign sales is predominantly earned in EUR. Domestic sales revenue is also generated
in EUR. Most long-term and short-term loans are contracted with a currency clause tied to EUR. In
addition to EUR, the Company is exposed to fluctuations in NOK, SEK, and UAH currencies. Changes in
the exchange rates of EUR and other currencies relative to EUR do not significantly impact the Group's
and Company's business results, and the Company does not use instruments for hedging against
currency risk.
As of December 31, 2024, if SEK weakened/strengthened by 1.00% against EUR (2023: 1.00%),
assuming other variables remain unchanged, the profit for the reporting period would increase by €126
thousand for the Group and €123 thousand for the Company (2023: €95 thousand for both Group and
Company) or decrease/increase accordingly. This is mainly due to positive/negative exchange rate
differences arising from the conversion of receivables from customers, payables to suppliers, loans,
and foreign currency cash expressed in EUR. According to Management's assessment, currency
fluctuations do not have a significant impact on the financial statements of the Group and Company.
(ii) Price Risk
The Group is exposed to the risk of investing in securities through fair value risks and price change
risks, as the Group's investments are classified in the consolidated balance sheet as available for sale
and at fair value through profit and loss. Investments in securities classified as available for sale are
not traded on the stock exchange, while securities classified at fair value through profit and loss are
traded on the stock exchange without significantly impacting the financial position. The management
of risks arising from their fair value and price changes is monitored by the Group through market
transactions and the performance of the investment entity.
(iii) Interest Rate Cash Flow Risk
Since the Group does not hold significant assets that generate interest income, the Group's revenues
and cash flow from operating activities are not substantially dependent on changes in market interest
rates. The Group's and Company's interest rate risk arises from long-term loans, bonds, and
commercial papers. Loans granted at variable rates expose the Group and Company to cash flow risk.
The Group and Company continuously monitor changes in interest rates. Various scenarios are
simulated, taking into account refinancing, renewal of current conditions, as well as alternative
financing. Based on these scenarios, the Group and Company calculate the impact of interest rate
changes on the profit and loss account. As of December 31, 2024, if the effective interest rate on
borrowings with variable rates increased/decreased by 0.82% annually (2023: 0.82%), post-tax results
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
216
NOTE 3 - FINANCIAL RISK MANAGEMENT (CONTINUED)
3.1 Financial risk factors (continued)
(a) Liquidity risk
Prudent liquidity risk management involves maintaining sufficient cash, ensuring the availability of
financial resources with an adequate amount of contracted credit lines and the ability to meet all
obligations. The Group's goal is to maintain financing flexibility by ensuring that contracted credit lines
are available. The table shows the maturities of contractual liabilities and receivables reported in the
balance sheet at the end of the reporting period. The analysis is based on undiscounted cash outflows
for financial liabilities and financial assets at the maturity date. The tables show cash flows for principal
and interest.
For the Group:
Average
weighted
interest rate
Up to 1
year
Between
1-5 years
Over 5
years
Total
contracted
cash flow
Net book
value
December 31, 2024
Loans receivable and
deposits
1%
3,557 6,197 - 9,754 9,392
Trade and other receivables
72,803
-
-
-
72,803
Cash and cash equivalents
12,328
-
-
-
12,328
Trade and other payables
(32,590)
-
-
(32,590)
(32,590)
Borrowings
4.80%
(5,601)
(8,180)
(230)
(14,011)
(12,833)
50,497
(1,983)
(230)
48,284
49,100
December 31, 2023
Loans and deposits given
2,128
6,126
-
8,254
8,193
Trade and other
receivables
1%
56,557
-
-
56,557
61,557
Cash and cash equivalents
12,345
-
-
12,345
3,345
Trade and other payables
(30,664)
-
-
(30,664)
(30,664)
Borrowings
4.80%
(4,293)
(7,778)
(853)
(12,924)
(11,954)
36,073
(1,652)
(853)
33,568
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
217
NOTE 3 – FINANCIAL RISK MANAGEMENT (CONTINUED)
3.1 Financial risk factors (continued)
Liquidity risk (continued)
For the Company:
Average
weighted
interest
rate
Up to 1
year
Between
1-5 years
Over 5
years
Total
contracted
cash flow
Net book
value
December 31, 2024
Loans receivable and
deposits
1% 3,763 6,221 - 9,984 9,613
Trade and other receivables
62,321
-
-
62,321
62,321
Cash and cash equivalents
9,692
-
-
9,692
9,692
Trade and other payables
(23,668)
-
-
(23,668)
(23,668)
Borrowings
4.80%
(5,650)
(8,328)
(342)
(14,320)
(13,251)
46,458
(2,107)
(342)
44,009
44,707
December 31, 2023
Loans and deposits given
1%
2,294
6,215
-
8,509
8,447
Trade and other receivables
49,185
-
-
49,185
49,185
Cash and cash equivalents
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
(b) Credit risk
The Group’s and the Company’s assets which potentially subject them to concentrations of credit risk
primarily include cash, trade and other receivables. The Group and the Company have policies in place
to ensure that the 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 note 28. Furthermore, judgements and estimates in respect of
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
218
NOTE 3 – FINANCIAL RISK MANAGEMENT (CONTINUED)
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 number
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 received loans are calculated as total received loans (long-term
and short-term shown in the balance sheet) minus cash and cash equivalents and given short-term
deposits. The total capital is calculated by adding to the capital net received loans and reserves shown
in the balance sheet.
The Company's gearing ratio is as follows:
(in thousands of EUR)
31 December
2024
31 December
2023
Borrowings (Note 27)
13,251
12,546
Cash and cash equivalents (Note 25)
(9,692)
(10,262)
Net debt
3,559
2,284
Equity
57,909
55,293
Total equity and net debt
61,468
57,577
Company's gearing ra�o
5.8%
4.0%
The Group's gearing ratio is as follows:
(in thousands of EUR)
31 December
2024
31 December
2023
Borrowings (Note 27)
12,833
11,954
Cash and cash equivalents (Note 25)
(12,328)
(12,345)
Net debt
505
(391)
Equity
68,311
62,152
Total equity and net debt
68,816
61,761
Group's gearing ra�o
0.7%
(0.6%)
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
219
NOTE 3 - FINANCIAL RISK MANAGEMENT (continued)
3.3 Fair value estimate
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 (i.e. derived from prices) (level 2).
- Inputs for the asset or liability that are not based on observable market data (i.e. 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 input required for a fair valuation of the instrument are visible, the instrument shall be
included in level 2. Where one or more significant input is not based on visible market data, the
instrument shall be included in level 3.
The table below presents the Company and the Group’s assets at fair value:
(in thousands of EUR)
Level 1
Level 2
Level 3
Total
Group
December 31, 2024
Property, plant and equipment
Land
-
-
8,815
8,815
Total
-
-
8,815
8,815
December 31, 2023
Property, plant and equipment
Land
-
-
8,815
8,815
Total
-
-
8,815
8,815
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
220
NOTE 4 - KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
The Group prepares estimates and makes 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 book value of assets and liabilities
within the next financial year are outlined below.
(a) Revenue recognition
The Company and the Group generally recognize revenue over time, but also at a point in time,
depending on the specifics of the specific contractual relationship with the customer as described in
the relevant accounting policy. When recognizing revenue over time, which primarily refers to the
construction segment, the progress measurement method emphasizes the importance of accurate
estimates in measuring progress in fulfilling the obligation and may include estimates of the scope of
deliveries and services required to fulfil the performance obligations defined by the contract. These
significant estimates include total estimated costs, total estimated revenues, contract risks, including
technical, political and regulatory risks and other judgements. 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 the Company's and the Group's activities (total costs incurred per project)
and the transfer of services to the customer. If revenue is recognized over time, the same is done by
measuring the costs incurred to a specific date in relation to the total expected costs required to fulfil
the performance obligations under the contract.
The Group also recognizes revenue at a point in time (primarily in the production segment) for the
delivery of goods by recognising revenue when the customer obtains control over certain goods, which
is usually after the delivery of the goods when the customer has full discretion over the goods and
when there are no unfulfilled obligations that could affect the customer's acceptance of the goods.
Delivery usually occurs when the goods have been delivered to the agreed location and the risk of loss
has been transferred to the customer and the customer has accepted the goods in accordance with
the contract, or the provisions on acceptance of the goods have expired or if the Group has objective
evidence that all the criteria for acceptance have been met.
(b) Recoverability of investments in subsidiaries
The Company annually identifies indicators that may indicate that the value of its investments in
subsidiaries (disclosed in Note 19) 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 identifying indicators of impairment, the Company considers a
number of factors. Depending on the circumstances, a single factor, or more than one in combination,
may result in an indication of impairment. The Company monitors key operating indicators of
subsidiaries, the most important of which are realized operating margins and net assets of subsidiaries.
When the Company concludes that one factor alone or more in combination result in an indication of
impairment for a particular investment, a detailed impairment test and an estimate of the recoverable
value of the investment are performed. The discounted cash flow method (DCF method) is generally
used to estimate the investment, which is based on the assumption that the value of the company
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
221
NOTE 4 - KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
(b) Recoverability of investments in subsidiaries (continued)
When calculating the recoverable amount, the Company generally applies the terminal growth rate of
cash flow after the estimated period until the stability of operations and discounts such cash flows
using a discount rate that reflects the risk of the subject asset 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 the individual subsidiary and the industry. Impairment tests are also tested for
sensitivity to changes in key variables such as discount rate, growth rate, etc. The Company also takes
into account impairments made in previous periods and considers potential reversals of impairments
made in previous periods, and to what extent, taking into account other circumstances in which the
NOTE 5 - IMPLEMENTATION OF NEW AND AMENDED INTERNATINAL FINANCIAL REPORTING
STANDARDS
Except for the changes mentioned below, for all periods presented in these consolidated financial
statements, the Company and the Group have consistently applied the accounting policies described
in the notes below.
(a) Applicable standards, amendments to existing standards and implementations – adopted
during 2023
The following new standards, interpretations and amendments to existing standards are mandatory
for periods starting on or after 1 January 2024:
• Amendments to IFRS 16 Leases: Lease liabilities in sale and leaseback arrangements
• Amendments to IAS 1 Presenting financial statements: Classification of liabilities as current or
non-current, Long-term liabilities in arrangements
• Amendments to IAS 7 Statement of cash flow and IFRS 7 Financial instruments: Disclosures:
Supplier financing arrangements.
The adoption of these standards did not have a significant impact on the amounts presented in the
statement of financial position or statement of comprehensive income or on the accounting policies
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
222
NOTE 5 - IMPLEMENTATION OF NEW AND AMENDED INTERNATINAL FINANCIAL REPORTING
STANDARDS (CONTINUED)
(b) Standards, amendments to existing standards and interpretations that have been issued but
are not yet effective
The following new standards, interpretations and amendments to existing standards issued by the
IASB and adopted by the EU are not yet effective or have not been adopted by the EU and therefore
the Group has not adopted them early and does not expect them to have a significant impact on the
Group's financial statements when they become effective:
• Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Inability to
Exchange
• Amendments to Classification and Measurement of Financial Instruments (IFRS 7 and IFRS 9):
Classification of Financial Assets, Electronic Payment Settlement
• IFRS 1, IFRS 7, IFRS 9, IFRS 10, IAS 7 Annual Improvements Volume 11: Clarifications,
Simplifications, Corrections and Amendments to Improve the Consistency of the IFRSs
• IFRS 18 Presentation and Disclosure in Financial Statements: New Standard
• IFRS 19 Non-Publicly Liable Subsidiaries - Disclosures: New Standard
• IFRS 9 and IFRS 7 Amendments to IFRS 9 and IFRS 7 Contracts relating to nature-dependent
NOTE 6 - INFORMATION ON BUSINESS SEGMENTS
The Group separately monitors and presents business results of basic business segments, Production
and Construction, whose operating activities are interrelated for the purpose of making profit for the
Group.
1. The Production segment includes forging works, the casting plant and the laboratory for
quality control and the production and sales of metal frames/structures, as well as the
manufacture and sales of suspension and jointing equipment.
2. The Construction segment includes the services of construction and project documentation
preparation of power and distribution facilities, transformer stations, laying submarine and
subterranean energy and telecommunication cables, posting public lighting, installing
antenna, television and telecommunication posts as well as work relating to the construction
of motorways.
Management monitors the operating results of the business segments to make decisions on the
allocation of resources and performance assessment. Segment performance assessment is based on
the gross segment revenue and realised profit from regular operations, as explained in the following
table. The Group manages finance income and costs, share of profit of joint ventures and income tax
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
223
NOTE 6 – INFORMATION ON BUSINESS SEGMENTS (continued)
Group's operating results per business segment
(In thousands of EUR)
Construction
Production
Other
Total
For the year ended 31
December 2024
Gross revenue
180,420
28,528
-
208,948
Inter-segment revenue
(6,714)
(7,745)
-
(14,459)
Total revenue
173,706
20,783
-
194,489
Opera�ng profit/(loss)
before deprecia�on
and amor�sa�on
11,573
937
-
12,510
Deprecia�on and
amor�sa�on
(3,799)
(228)
-
(4,027)
Opera�ng profit/(loss)
7,774
709
-
8,483
Total assets
137,817
18,624
-
156,441
Total liabili�es
78,410
9,720
-
88,130
For the year ended 31
December 2023
Gross revenue
151,534
28,663
1
180,198
Inter-segment revenue
(5,125)
(9,283)
-
(14,408)
Total revenue
146,409
19,380
1
165,790
Opera�ng profit/(loss)
before deprecia�on
and amor�sa�on
(735)
1,918
(13)
1,170
Deprecia�on and
amor�sa�on
(3,283)
(168)
-
(3,451)
Opera�ng profit/(loss)
(4,018)
1,750
(13)
(2,281)
Total assets
117,742
20,422
65
137,929
Total liabili�es
63,915
11,806
15
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
224
NOTE 6 – INFORMATION ON BUSINESS SEGMENTS (continued)
/i/ Sales income allocated to geographical area based on customer headquarters.
Dalekovod Group
2024
2023
(in thousands of
EUR)
%
(in
thousands of
EUR)
%
Croatia
62,034
32,22
53,757
32,42
Sweden
33,589
17,27
38,272
23,08
Norway
26,019
13,06
23,397
14,11
Slovenia
21,120
10,86
14,387
8,68
Bosnia and Herzegovina
17,481
8,99
11,587
6,99
Germany
7,707
3,96
2,387
1,44
Northern Macedonia
7,495
3,85
6,020
3,63
Ukraine
6,176
3,18
4,254
2,57
United Kingdom
996
0,51
425
0,26
Other
11,872
6,10
11,304
6,82
Total
194,489
100
165,790
100
In 2024 the Group achieved 12% and the Company 18% of total sales revenue with its largest customer.
In 2024 the Group achieved 10% and the Company 15% of total sales revenue with the next largest
customer.
In 2023 the Group achieved 14% and the Company 19% of total sales revenue with its largest customer.
In 2023 the Group achieved 13% and the Company 18% of total sales revenue with the next largest
customer.
/ii/ Sales revenues by sectors are as follows:
Dalekovod Group
2024
2023
(in thousands of EUR)
Energe�cs
139,869
124,414
Rail road
20,813
7,308
Sale of metal construc�ons
6,845
6,973
Sale of suspension and coupling equipment
13,936
12,407
Roads
5,964
9,349
Planning
5,856
4,870
Industrial buildings and facili�es
17
23
Other
1,189
446
Total
194,489
165,790
Revenue from construction contracts amounts to 173,706 thousand EUR for the Group (2023: 146,409
thousand EUR) and EUR 134,231 thousand for the Company (2023: EUR 118,633 thousand). Revenue
from construction contracts is recognized over time while revenue from production is recognized at a
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
225
NOTE 6 - INFORMATION ON BUSINESS SEGMENTS (continued)
The following table shows information on receivables and liabilities to customers based on
construction contracts, for which, on the reporting date, receivables from customers under a
contractual obligation or liabilities to customers under a contractual obligation were stated:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024 2023 2024 2023
Trade receivables
41,411
35,484
33,943
30,617
Retention
8,628
7,411
8,628
7,410
Contract assets
31,022
20,830
27,587
17,988
Contract liabilities
(25,777)
(18,530)
(23,100)
(15,864)
55,284
45,195
47,058
40,151
Contract assets primarily relate to the Company’s or the Group’s rights to compensation for work
performed but not yet paid for at the reporting date. Contract assets are transferred to receivables
when the rights become unconditional. This usually occurs when the Company or the Group issues an
invoice to the customer.
Contract liabilities relate to deferred revenue for construction work, for which revenue is recognised
over time, and to advances received from customers.
Advances received for projects under construction for the Company, which are active at the reporting
date, are disclosed within advances in Note 29 and amount to EUR 14,260 thousand (2023: EUR 9,601
NOTE 7 – OTHER REVENUE
(in thousands of EUR)
2024
2023
2024
2023
Income from reversal of
provisions
-
697
-
678
Insurance claims proceeds
105
61
104
58
Rental income
117
88
1,290
857
Income from write-off of
liabilities
16
134
-
-
Other operating income
1,120
1,049
1,753
1,123
1,358
2,029
3,147
2,716
The Company's rental income is generated from investments in real estate (Note 18), based on the leases
that the Company grants to its affiliated companies Dalekovod MK d.o.o. and Dalekovod OSO d.o.o.
The most significant part of other revenues refers to revenues from the sale of waste coming from the
Sweden branch in the amount of EUR 432 thousand and from the Macedonia branch in the amount of
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
226
NOTE 8 - COSTS OF MATERIALS AND SERVICES
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Raw material and material
Raw material and material
36,789
46,577
30,054
40,396
Energy
2,465
2,711
1,816
1,900
Spare parts
2,259
1,149
1,766
1,010
41,513
50,437
33,636
43,306
External services
Subcontractor manufacturing
services
46,046
32,438
29,397
19,969
Rental expense
5,419
7,162
5,317
7,063
Transporta�on
2,627
2,421
1,649
1,436
Repairs and maintenance
2,449
2,039
1,808
1,495
Adver�sing and promo�on
408
253
373
226
Other material costs
711
770
418
411
57,660
45,083
38,962
30,600
Total cost of materials and services
99,173
95,520
72,598
73,906
NOTE 9 – EMPLOYEE BENEFITS
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Net salaries
27,343
23,533
20,746
18,042
Taxes and contribu�ons on and from
salaries
12,238 9,569 8,151 6,218
Severance costs
207
496
160
351
Other staff costs
5,923
4,071
4,565
2,992
45,711
37,669
33,622
27,603
Other staff costs include gifts, jubilee awards, field allowance, labour hire services, employee
performance awards and other benefits.
The cost of employees includes the calculated cost for management bonuses, the Company 1,518
thousand euros and the Group 1,653 thousand euros.
As of 31 December 2024, there were 1,081 employees in the Group (2023: 1,029 employees) and 684
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
227
NOTE 10 - OTHER OPERATING EXPENSES
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Intellectual and non-
produc�on services
3,471
2,788
2,531
2,676
Daily allowances and
travel expenses
4,604
2,720
4,364
2,503
Insurance
1,419
1,296
1,292
1,156
Bank charges
1,076
962
852
781
Taxes and contribu�ons
789
641
589
474
Entertainment
688
456
436
234
Impairment of inventories
380
324
-
-
Change in the provision
for legal cases
(1,449) 299 (1,446) 299
Change in other
provisions
2,469 - 2,469 -
Interest from suppliers
46
70
11
41
Sponsorships, dona�ons
and other aids
106
50
58
26
Fines and penal�es
11
56
-
27
Impairment and write-off
of property, plant and
equipment
- 41 - -
Inventory shortages
47
24
11
6
Cost of value adjustment
of investments in
subsidiaries (Note 19)
- - 3,110 -
Other
1,574
799
1,178
875
15,231
10,526
15,455
9,098
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. The total audit fees at the level
of the Company amount to EUR 109 thousand at the Company level (2023: EUR 76 thousand), while at
the Group level they amounted to EUR 151 thousand (2023: EUR 118 thousand), Auditors' fees relate
to statutory audits of Group member companies.
In 2024 the auditors provided the Group with permitted non-audit services related to financial analysis
in the amount of EUR 15 thousand (2023: EUR 30 thousand).
Within the costs of intellectual and non-production services, there are non-production services, which
largely consist of various services of testing, commissioning, etc. on projects, then legal services, design
services and security services.
The cost of daily allowances and travel expenses in 2024 includes the cost of accommodation and
meals, which to a significant extent constitute the costs of workers in the field, especially posted
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
228
NOTE 11 – VALUE ADJUSTMENT OF FINANCIAL ASSETS
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Impairment of financial assets
-
(6,636)
-
(6,636)
Impairment of trade receivables and loans – net
(155) 1
(127) 343
(155)
(6,635)
(127)
(6,291)
Impairment of trade receivables and loans in 2024 refers to impairment of trade receivables and the
NOTE 12 - FINANCE INCOME AND COSTS - NET
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Posi�ve foreign exchange-rate differences
632
1,116
572
1,064
Income from interest
28
11
15
68
Income from unwinding of discount on
guarantee deposits
70 - 70 -
Interest income from bank deposits
16
2
-
1
Income from shares in profit
-
-
905
978
Other finance income
8
651
6
95
Finance income
754
1,780
1,568
2,206
Nega�ve exchange-rate differences
(1,081)
(415)
(1,014)
(355)
Interest expenses
(729)
(901)
(724)
(931)
Discount cost of long-term receivables
-
(211)
-
(211)
Finance costs
(1,810)
(1,527)
(1,738)
(1,497)
Income from shares in profit at the Company level refers to the voted profits of the companies Dalekovod
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
229
NOTE 13 - INCOME TAXES
The reconciliation of accounting and taxable profit is shown in the table below:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Profit/(loss) before tax
7,426
(2,040)
3,398
(4,062)
Tax at the rate of 18%
1,337
(367)
612
(731)
Effect of non-taxable income
(298)
(286)
(282)
(269)
Effect of tax non-deductible
expenses
1,398
396
1,248
236
Effect of tax losses not
recognized as deferred tax
assets
163 1,049 - 1,049
Utilized tax losses for which
deferred tax assets were not
recognized
(336) (454) (325) -
Effect of applying different
tax rates
(904) 835 (471) 402
Other
-
(3)
-
(3)
Income tax expense
1,360
1,170
782
684
Effective tax rate
18.3%
(43.6%)
23.0%
(16.8%)
In accordance with the regulations of the Republic of Croatia, the Tax Authority may at any time inspect
books and records of the Company and Company subsidiaries operating in Croatia within 3 years
following the year in which the tax liability is reported, and may impose additional tax assessments
and penalties. Companies and foreign subsidiaries abroad must comply with tax regulations of the
country in which they operate. During the year there were no changes in tax rates in countries where
members of the Group operate. Reported income tax expense in the Company includes income tax
expense recorded in separate business units abroad in accordance with the tax laws of the countries
in which the units operate.
Overview of tax losses for which deferred tax asset has not been recognised is as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Unu�lised tax losses
Tax loss 2019 - expires in 2024
-
4,690
-
-
Tax loss 2020 - expires in 2025
5,172
7,841
3,185
5,854
Tax loss 2021 - expires in 2026
6,364
6,364
6,233
6,233
Tax loss 2023 - expires in 2028
5,819
5,819
5,819
5,819
Tax loss 2024 - expires in 2029
1,003
-
-
-
18,358
24,714
15,237
17,906
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
230
NOTE 13 - INCOME TAXES (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.
Deferred tax liability is recognized upon revaluation of assets (Note 17).
Movement of deferred tax liability
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
At beginning of year
1,406
1,406
1,406
1,406
Charged to revalua�on reserves
-
-
-
-
Reversed
-
-
-
-
At end of year
1,406
1,406
1,406
1,406
NOTE 14 - BASIC AND DILUTED EARNINGS 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.
Dalekovod Group
(in thousands of EUR)
2024
2023
Net loss atributable to shareholders (in
thousands of EUR)
6,067
(3,210)
Weighted average number of shares:
31,246,205
41,246,205
Basic earnings per share (in EUR)
0,15
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2024
231
NOTE 15 - INTANGIBLE ASSETS
The Group
(in thousands of EUR)
Goodwill
So�ware
Assets under
construc�on
Total
At January 1, 2023
Cost
161
6,077
687
6,925
Accumulated amor�za�on and
impairment losses
-
(5,942)
-
(5,942)
Net book value
161
135
687
983
For the year ended 31 December 2023
At January 1
161
135
687
983
Addi�ons
-
9
111
120
Capitalized salary costs
-
-
6
6
Transfer
-
712
(712)
-
Amor�za�on
-
(140)
-
(140)
At December 31st
161
716
92
969
At 31 December, 2023
Cost
161
6,798
92
7,051
Accumulated amor�za�on and
impairment losses
-
(6,082)
-
(6,082)
Net book value
161
716
92
969
For the year ended 31 December 2024
At January 1
161
716
92
969
Addi�ons
-
16
113
129
Transfer
-
12
(12)
-
Amor�za�on
-
(159)
-
(159)
At December 31st
161
585
193
939
At December 31, 2024
Cost
161
6,826
193
7,180
Accumulated amor�za�on and
impairment losses
-
(6,241)
-
(6,241)
Net book value
161
585
193
939
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2024
232
NOTE 15 - INTANGIBLE ASSETS (continued)
The Company
(in thousands of EUR)
So�ware
Assets under
construc�on
Total
At January 1, 2023
Cost
5,659
683
6,342
Accumulated amor�za�on
(5,573)
-
(5,573)
Net book value
86
683
769
For the year ended 31 December 2023
At January 1
86
683
769
Addi�ons
-
101
101
Capitalized salary costs
-
6
6
Transfer
704
(704)
-
Amor�za�on
(120)
-
(120)
At January 31st
670
86
756
At 31 December, 2023
Cost
6,363
86
6,449
Accumulated amor�za�on
(5,693)
-
(5,693)
Net book value
670
86
756
For the year ended 31 December 2024
At January 1
670
86
756
Addi�ons
-
106
106
Amor�za�on
(141)
-
(141)
At December 31st
529
192
721
At 31 December, 2024
Cost
6,363
192
6,555
Accumulated amor�za�on
(5,834)
-
(5,834)
Net book value
529
192
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2024
233
NOTE 16 - PROPERTY, PLANT AND EQUIPMENT
The Group
(in thousands of EUR)
Land
Buildings
Plants and
equipment
Assets
under
construc�on
Total
At January 1, 2023
Cost or deemed cost
10,436
38,900
52,058
110
101,504
Accumulated deprecia�on and
impairment losses
-
(31,345)
(38,330)
-
(69,675)
Net book value
10,436
7,555
13,728
110
31,829
For the year ended
31 December 2023
At January 1
10,436
7,555
13,728
110
31,829
Correc�on IFRS 16
-
-
(109)
-
(109)
Addi�ons
-
27
3,835
-
3,862
Transfer
-
36
(36)
-
-
Disposals and write-offs
-
(3)
(632)
(41)
(676)
Deprecia�on
-
(742)
(2,569)
-
(3,311)
At December 31st
10,436
6,873
14,217
69
31,595
At December 31, 2023
Cost or or deemed cost
10,436
38,960
55,116
69
104,581
Accumulated deprecia�on and
impairment losses
-
(32,087)
(40,899)
-
(72,986)
Net book value
10,436
6,873
14,217
69
31,595
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
234
NOTE 16 - PROPERTY, PLANT AND EQUIPMENT (continued)
The Group
For the year ended
31 December 2024
Land
Buildings
Plants and
equipment
Assets under
construc�on
Total
At January 1
10,436
6,873
14,217
69
31,595
Transfer
-
29
5,708
(5,737)
-
Exchange rate differences
-
-
24
-
24
Disposals and write-offs
-
-
(402)
-
(402)
Addi�ons
-
8
2,071
6,365
8,444
Deprecia�on
-
(1,067)
(2,800)
-
(3,867)
At December 31st
10,436
5,843
18,818
697
35,794
At December 31, 2024
Cost or deemed cost
10,436
38,997
62,895
697
113,025
Accumulated deprecia�on and
impairment losses
-
(33,154) (44,077) -
(77,231)
Net book value
10,436
5,843
18,818
697
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
235
NOTE 16 - PROPERTY, PLANT AND EQUIPMENT (continued)
The Company
(in thousands of EUR)
Land
Buildings
Plants and
equipment
Total
At January 1, 2023
Cost or deemed cost
8,815
14,458
37,195
60,468
Accumulated
deprecia�on
-
(10,777)
(26,439)
(37,216)
Net book value
8,815
3,681
10,756
23,252
For the year ended
31 December 2023
At January 1
8,815
3,681
10,756
23,252
Revalua�on
-
-
-
-
Addi�ons
-
27 3,434
3,461
Disposals and write-offs
-
(3)
(764)
(767)
Deprecia�on
-
(288)
(1,950)
(2,238)
At December 31st
8,815
3,417
11,476
23,708
At December 31, 2023
Cost or deemed cost
8,815
14,482
39,865
63,162
Accumulated
deprecia�on
-
(11,065)
(28,389)
(39,454)
Net book value
8,815
3,417
11,476
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
236
NOTE 16 - PROPERTY, PLANT AND EQUIPMENT (continued)
The Company
For the year ended
31 December 2024
Land
Buildings
Plants and
equipment
Assets
under
construc�on
Total
At January 1
8,815
3,417
11,476
-
23,708
Addi�ons
-
-
1,010
6,365
7,375
Transfer
-
20
5,717
(5,737)
-
Disposals and write-
offs
- 48 (340) - (292)
Exchange rate
differences
- (67) 91 - 24
Deprecia�on - (287)
(2,508) - (2,795)
At December 31st
8,815
3,131
15,446
628
28,020
At December 31,
2024
Cost or deemed cost
8,815
14,483
46,343
628
70,269
Accumulated
deprecia�on
-
(11,352)
(30,897)
-
(42,249)
Net book value
8,815
3,131
15,446
628
28,020
The land was revalued and assessed at fair value. The initial cost of the land amounted to EUR 2,410
thousand and an amount of EUR 6,405 thousand was recognised in previous years in revaluation
reserve as the fair value adjustment. Other tangible assets 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 assets.
Plants in the amount of EUR 2,111 thousand were pledged as collateral for loan repayment as of 31
December 2024 (2023: EUR 2,224 thousand).
As of 31 December 2024, assets under lease where the Group and the Company are lessees amounted
to EUR 521 thousand for the Group and EUR 340 thousand for the Company (2023: EUR 68 thousand
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
237
NOTE 17 – INVESTMENT PROPERTY
(in thousands of EUR)
Land
Buildings
Plants and
equipment
Total
At January 1, 2023
Cost
790
20,687
3,199
24,676
Accumulated deprecia�on
-
(17,198)
(1,497)
(18,695)
Net book value
790
3,489
1,702
5,981
For the year ended 31
December 2023
At January 1
790
3,489
1,702
5,981
Deprecia�on
-
(453)
(249)
(702)
At December 31st
790
3,036
1,453
5,279
At December 31, 2023
Cost
790
20,687
3,199
24,676
Accumulated deprecia�on
-
(17,651)
(1,746)
(19,397)
Net book value
790
3,036
1,453
5,279
For the year ended 31
December 2024
At January 1
790
3,036
1,453
5,279
Disposals and write-offs
-
(48)
(17)
(65)
Deprecia�on
-
(391)
(248)
(639)
At December 31st
790
2,597
1,188
4,575
At December 31, 2024
Cost
790
20,639
3,182
24,611
Accumulated deprecia�on
-
(18,042)
(1,994)
(20,036)
Net book value
790
2,597
1,188
4,575
Investments in real estate at the Company level relate to a portion of real estate that is leased intra-
group to subsidiaries. These assets are treated as regular real estate at the Group level and the Group
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
238
NOTE 18 – LEASES
The Company leases vehicles under lease agreements.
/i/ The leases reported in the statement of financial position within the Property, plant and equipment
as at 31 December are as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Property with the right of use:
Vehicle
496
29
340
-
Equipment
25
39
-
-
521
68
340
-
Lease liabilities:
Short-term
188
34
147
-
Long-term
338
37
198
-
526
71
345
-
/ii/ Long-term lease liabilities at 31 December as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
1-2 years
227
15
198
-
2-5 years
111
22
-
-
338
37
198
-
/iii/ The leases reported in the statement of comprehensive income are as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Deprecia�on
155
56
111
-
Interest expenses (Note 12)
22
4
13
-
Rental cost related to short-term
leases (Note 8)
5,419 7,162 5,317
7,063
5,596
7,222
5,441
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
239
NOTE 18 - LEASES (continued)
/iv/ An overview of movements in right-of-use assets is as follows:
Dalekovod
Group
Dalekovod
Group
Dalekovod d.d. Dalekovod d.d.
2024
2023
2024
2023
(in thousands of EUR)
Assets
Assets
Assets
Assets
For the year ended at 31 December 2023
Opening net book value of leases
recognized under IFRS 16
1,660
1,738
843 952
Accumulated deprecia�on
(1,592)
(1,536)
(843)
(843)
Net book value
68
202
-
109
Opening net book value
68
202
-
109
Increase
608
-
451
-
Correc�on IFRS 16
-
(78)
-
(109)
Deprecia�on
(155)
(56)
(111)
-
Closing net book value
521
68
340
-
At 31 December 2024
Cost
2,268
1,660
1,294
843
Accumulated deprecia�on
(1,747)
(1,592)
(954)
(843)
Net book value
521
68
340
-
NOTE 19 - INVESTMENTS IN SUBSIDIARIES
Dalekovod d.d.
(in thousands of EUR)
2024
2023
At January 1
11,130
6,491
Value adjustment /i/
(3,110)
-
Transfer of share
-
4,904
Prodaja Adria d.o.o.
-
(265)
Closing of Cinčaonica d.o.o. in liquida�on /ii/
(3)
-
At December 31st
8,017
11,130
/i/ The value adjustment of investments in subsidiaries in 2024 in the amount of EUR 3,110 thousand
refers to Dalekovod MK d.o.o. (note 20). The Management Board recognized a value adjustment
following an evaluation conducted by an independent appraiser.
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2024
240
NOTE 19 - INVESTMENTS IN SUBSIDIARIES (continued)
At 31 December 2024 the Company owns shares in the following subsidiaries:
Company name
Country of
incorpora�on
Primary
ac�vity
Ownership
Investment
Impairment
Net investment
(in thousands of EUR)
Dalekovod d.o.o., Ljubljana
Slovenia
Construc�on
100.00
275
-
275
Dalekovod d.o.o., Mostar
Bosnia and
Herzegovina
Construc�on
100.00
28
-
28
Dalekovod MK d.o.o., Velika Gorica
Croa�a
Produc�on
100.00
29,565
(29,186)
379
Dalekovod-projekt d.o.o., Zagreb
Croa�a
Construc�on
100.00
612
-
612
Dalekovod TKS a.d., Doboj
Bosnia and
Herzegovina
Produc�on
97.25 2,700
(2,700) -
Denacco Namibia (PTY) Ltd
Namibia
Construc�on
60.00
2
(2)
-
Dalekovod OSO d.o.o., Velika Gorica
Croa�a
Other
100.00
4,904
-
4,904
Dalekovod EMU d.o.o. Zagreb
Croa�a
Construc�on
100.00
1,003
-
1,003
EL-RA d.o.o. Zagreb
Croa�a
Other
100.00
531
-
531
Dalekovod Libya for engineering, joint venture
Libya
Construc�on
65.00
117
(117)
-
Dalekovod Ukrajina d.o.o.
Ukraine
Construc�on
100.00
10
-
10
Dalekovod Norge AS
Norway
Construc�on
100.00
275
-
275
40,022
(32,005)
8,017
During 2024, the liquidation of the company Cinčaonica d.o.o. in liquidation was completed, and a value impairment of the investmnet in the company Dalekovod
MK d.o.o. was recognized, amounting to EUR 3,110 thousand. The value of the company Dalekovod MK d.o.o. at 31 December 2024 is EUR 379 thousand, which
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
241
NOTE 19 - INVESTMENTS IN SUBSIDIARIES (continued)
At 31 December 2023 the Company owns shares in the following subsidiaries:
Company name
Country of
incorpora�on
Main ac�vity
Ownership
Investment
Impairment
Net investment
(in thousands of EUR)
Dalekovod d.o.o., Ljubljana
Slovenia
Construc�on
100.00
275
-
275
Dalekovod d.o.o., Mostar
Bosnia and
Herzegovina
Construc�on
100.00
28
-
28
Dalekovod MK d.o.o., Velika Gorica
Croa�a
Produc�on
100.00
29,565
(26,076)
3,489
Dalekovod-projekt d.o.o., Zagreb
Croa�a
Construc�on
100.00
612
-
612
Dalekovod TKS a.d., Doboj
Bosnia and
Herzegovina
Produc�on
97.25 2,700
(2,700) -
Denacco Namibia (PTY) Ltd
Namibia
Construc�on
60.00
2
(2)
-
Dalekovod OSO d.o.o., Velika Gorica
Croa�a
Other
100.00
4,904
-
4,904
Dalekovod EMU d.o.o. Zagreb
Croa�a
Construc�on
100.00
1,003
-
1,003
EL-RA d.o.o. Zagreb
Croa�a
Other
100.00
531
-
531
Dalekovod Libya for engineering, joint venture
Libya
Construc�on
65.00
117
(117)
-
Dalekovod Ukrajina d.o.o.
The Ukraine
Construc�on
100.00
10
-
10
Dalekovod Norge AS
Norway
Construc�on
100.00
275
-
275
Cinčaonica usluge d.o.o.
Croa�a
Other
100.00
3
-
3
40,025
(28,895)
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2024
242
NOTE 19 – INVESTMENTS IN SUBSIDIARIES (continued)
Recoverability of investments in subsidiaries
At the end of each reporting period, the Company assesses whether there are indicators that the value
of investments in dependent entities needs to be reduced and estimates the recoverable amount of
the investment.
For investment valuation, the Discounted Cash Flow (DCF) method is applied, based on the assumption
that a company's value represents the present value of its future net cash flows. The objectivity of the
DCF calculation largely depends on the realism of medium-term business plans, the discount rate
applied to future cash flows, and the calculation of the entities' residual value. Determining the
discount rate depends on the interest rate applied to risk-free investments (government bonds) and a
risk premium reflecting the specificities, market position, and technological capabilities of the entity.
In 2024, as in 2023, the Company performed impairment tests on investments in dependent entities
where indicators of value reduction were identified. During 2024, an independent external appraiser
conducted valuations of the dependent entities.
In 2024, the Company conducted an impairment test on its investment in the dependent entity
Dalekovod MK d.o.o. The recoverable amount calculation was based on the approved five-year
business plans of the dependent entity, grounded in existing order books and the application of the
discounted future cash flow method with a capital return rate of 9.96%. The impairment test assumed
a compound annual growth rate of 6% over the five-year period and a terminal growth rate of 1%.
Based on the valuation for Dalekovod MK d.o.o., a significant impairment was recognized (Note 19).
The Company also analyzed the sensitivity of impairment tests 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 an unchanged terminal growth rate) would not significantly impact the
impairment test outcome for Dalekovod MK d.o.o., nor would a reasonable decrease (by 50 basis
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
243
NOTE 20 - INVESTMENTS IN ASSOCIATES
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
At beginning of year
1
1
1
1
At end of year
1
1
1
1
Associates are as follows:
Dalekovod Group
Share %
(in thousands of EUR)
2024
2023
2024
2023
Members of TLM Group
1
1
22-25
22-25
Total
1
NOTE 21 – FINANCIAL INSTRUMENTS PER CATEGORIES
Group
(in thousands of EUR)
Note
2024
2023
Financial assets
Trade receivables
24
41,411
35,483
Receivables under construc�on agreements
24
31,022
20,830
Loans receivable and deposits
24
9,429
8,193
Other receivables
24
333
244
Cash and cash equivalents
25
12,328
12,345
Total
94,523
77,095
Financial liabili�es
Loans
27
4,035
5,718
Bonds
27
1,346
1,540
Lease liabili�es
27
7,452
4,696
Trade payables
28
31,850
30,271
Other payables
28
740
393
Total
45,423
42,618
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
244
NOTE 21 – FINANCIAL INSTRUMENTS BY CATEGORY (continued)
The Company
(in thousands of EUR)
Note
2024
2023
Financial assets at amor�sed cost
Trade receivables
24
33,943
30,617
Receivables under construc�on agreements
24
27,587
17,988
Loans receivable and deposits
24
9,613
8,447
Interest receivables
24
13
85
Receivables from subsidiaries for share in profit
24
536
331
Other receivables
24
242
164
Cash and cash equivalents
25
9,692
10,262
Total
81,626
67,894
Financial liabili�es at amor�sed cost
Loans
27
4,217
5,909
Bonds
27
1,776
2,033
Lease liabili�es
27
7,258
4,604
Trade payables
28
23,271
25,142
Other payables
28
397
335
Total
36,919
38,023
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 DECEMBER 2024
245
NOTE 22 - LOANS AND RECEIVABLES
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Long-term deposits
910
919
900
909
Long-term guarantee deposits -
reten�ons
5,264
5,556
5,264
5,555
Other long-term receivables
12
6
-
-
Long-term loans receivable:
- housing and other loans to
employees
11
16
11
13
- loans to subsidiaries
-
-
108
108
Impairment of long-term deposits
and loans receivable
(362)
(432)
(362)
(432)
Total long-term deposits and loans
receivable
5,835
6,065
5,921
6,153
5,835
6,065
5,921
6,153
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. While
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.
For other retentions, the accumulation in % is characteristic, defined by the contract, for the entire
period of contract implementation. 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
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
246
NOTE 22 - LOANS AND RECEIVABLES (continued)
Changes in provisions for impairment of long-term deposits and loans are as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
At January 1
432
221
432
221
Discount of guarantee deposits
(70)
211
(70)
211
At 31 December
362
432
362
NOTE 23 - INVENTORIES
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Raw materials
6,520
6,956
1,263
1,118
Finished and semi-finished products
and work in progress
3,879
4,233
-
-
Spare parts
1,388
1,298
1,022
767
Commercial goods
4,402
3,647
73
579
16,189
16,134
2,358
2,464
Cost of raw materials and supplies recognised in the income statement is disclosed in Note 8.
The cost of inventory adjustment recognized in the income statement is shown in note 10.
The value of the inventory position in the Statement of financial position is reduced by the cost of value
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
247
NOTE 24 - TRADE AND OTHER RECEIVABLES
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Domes�c trade receivables
16,448
13,894
17,538
15,484
Foreign trade receivables
25,304
21,775
16,539
15,140
Impairment of trade receivables
(341)
(186)
(134)
(7)
41,411
35,483
33,943
30,617
Receivables from customers for
contract work
31,022
20,830
27,587
17,988
Guarantee deposits (reten�ons) -
short-term part
3,364
1,855
3,364
1,855
Short-term deposits /iii/
193
221
129
105
Loans to subsidiaries
-
-
199
334
Other short-term loans /i/
199
256
162
204
Receivables for interest
-
-
13
85
Receivables from subsidiaries for
profit share
-
-
536
331
Other receivables
6,970
6,880
6,879
6,800
Impairment of other financial
assets
(6,799)
(6,840)
(6,799)
(6,840)
Total financial assets
76,360
58,685
66,013
51,479
Advances /ii/
5,457
8,250
4,791
7,352
Receivables from employees
17
6
16
6
VAT receivables
2,238
2,725
1,428
2,048
Outstanding VAT receivables
83
2
34
2
Prepaid expenses
865
903
844
872
Total non-financial assets
8,660
11,886
7,113
10,280
85,020
70,571
73,126
61,759
/i/ Other short-term loans and loans to subsidiaries are with annual interest rates from 0%-3.25%.
Interest rates 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 9 months with equal repayment instalments, and are secured by
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
design services.
/iii/ Short-term deposits are mostly dedicated time deposits whose purpose is insurance for issued
bank placements and deposits. All deposits are due within a period of one year after the reporting
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
248
NOTE 24 - TRADE AND OTHER RECEIVABLES (continued)
Ageing structure of customer receivables is as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Not due
26,008
19,147
22,463
16,249
Up to 90 days
10,015
9,266
5,739
6,517
From 91 to 180 days
1,737
1,627
1,723
1,749
Over 180 days
3,651
5,443
4,018
6,102
41,411
35,483
33,943
30,617
Changes in provisions for impairment of customer receivables and other financial assets are as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
At January 1
7,026
966
6,847
1,137
Addi�onal
impairment
155
6,643
127
6,581
Collected amounts
(290)
Writen off
(41)
(583)
(41)
(581)
At 31 December
7,140
7,026
6,933
6,847
The carrying amounts of the Group’s and the Company’s financial assets are denominated in the
following currencies:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
EUR
48,689
39,465
39,026
32,769
NOK
8,010
3,500
7,768
3,213
SEK
11,337
7,879
10,897
7,694
UAH
2,581
2,728
2,581
2,728
Other
5,743
5,113
5,741
5,075
Total
76,360
58,685
66,013
51,479
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
249
NOTE 25 - CASH AND CASH EQUIVALENTS
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Cash at bank and in cash in local currency
6,807
5,916
4,506
4,211
Cash at bank and in cash in foreign currency
5,521
6,429
5,186
6,051
12,328
12,345
9,692
10,262
Cash and cash equivalents in foreign currency is as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
NOK
2,287
1,657
2,287
1,657
SEK
2,618
4,246
2,529
4,245
UAH
12
21
7
10
Other foreign currencies
604
505
363
139
Total
5,521
6,429
5,186
NOTE 26 - SHAREHOLDERS’ EQUITY
Share capital
The share capital as of December 31, 2024 is EUR 41,247 thousand (December 31, 2024: EUR 41,247
thousand), and is divided into 41,247,193 shares (2023: 41,247,193 shares). The nominal value of one
share is EUR 1.00 (December 31, 2023: (EUR 1.00).
The structure of shareholders at December 31 is as follows:
Number of shares
Share
2024
2023
2024
2023
Napredna energetska rješenja d.o.o.
31,000,000
31,000,000
75.16%
75.16%
Financial ins�tu�ons
8,543,017
9,144,753
20.71%
22.17%
Foreign individuals or en��es
3,776
3,928
0.01%
0.01%
Individuals
1,630,438
463,956
3.95%
1.12%
Own shares
988
988
0.00%
0.00%
Other
68,974
633,568
0.17%
1.54%
41,247,193
41,247,193
100%
100%
At 31 December 2024 the company Napredna energetska rješenja d.o.o. (NER) held 75.16% of
Company shares. Only member of NER, holding 100% of ownership share is company KONČAR-
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
250
NOTE 26 - SHAREHOLDERS’ EQUITY (CONTINUED)
Capital reserves
During 2024 there were no changes to 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 2024 the Company owns 988 treasury shares (2023: 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
(2023: EUR 1,124 thousand).
Revaluation reserves
Revaluation reserves arise from determining the fair value of the land. In 2024 there were no
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
251
NOTE 27 - BORROWINGS
(in thousands of
EUR)
Average
interest
Dalekovod Group
Dalekovod d.d.
rate
2024
2023
2024
2023
Long-term
Loans from banks
and subsidiaries
5.78%
1,497
3,131
1,497
3,131
Bonds
4.00%
1,143
1,345
1,508
1,776
Lease liabili�es
6.10%
5,172
3,330
5,022
3,280
7,812
7,806
8,027
8,187
Short-term
Loans from banks
and subsidiaries
5.78%
2,538
2,587
2,720
2,778
Bonds
4.00%
203
195
268
257
Lease liabili�es
6.10%
2,280
1,366
2,236
1,324
5,021
4,148
5,224
4,359
Total loans
12,833
11,954
13,251
12,546
Gross liabilities for lease - minimum lease payments:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Up to 1 year
2,329
1,374
2,237
1,323
Between 1 to 5 years
5,172
3,330
5,021
3,281
7,501
4,704
7,258
4,604
Future finance costs for finance lease
(49)
(8)
0
0
Present value of liabili�es for finance
lease
7,452
4,696
7,258
4,604
Of the total amount of loans from banks and subsidiaries reported by the Company and the Group as
of December 31, 2024, part of the debt in the amount of EUR 905,000 thousand relates to a bank in
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
252
NOTE 27 – BORROWINGS (continued)
The Group's borrowings in the amount of EUR 7,960 thousand (2023: EUR 8,454 thousand) are
exposed to changes in interest rates, as the contractual interest rate is variable. Other borrowings in
the amount of EUR 4,873 thousand have a fixed interest rate and relate to bonds and part of financial
leasing liabilities. (2023: EUR 3,500 thousand).
The interest rate for bonds is fixed at 4%, for the loan granted to the subsidiary Dalekovod NUF
subsidiary with a repayment period until the end of 2024, the currently applicable interest rate is
10.99%, the variable interest rate for financial lease ranges between 5.64%-6.75%, while the fixed
interest rate for financial lease is 4.75%-6.55%.
Borrowings for the Group:
(in thousands of EUR)
Loans and bonds
Lease
liabilities
Total,
At January 1, 2023 4,106 4,179 8,285
Cash receipts 4,900 - 4,900
Loan repayments (1,332) - (1,332)
Bond redemp�on (188) - (188)
New leases - 1,923 1,923
Lease repayment - (1,069) (1,069)
Other non-cash transac�ons - (109) -109
Exchange rate differences (228) (228) -456
At December 31, 2023 7,258 4,696 11,954
At January 1, 2024 7,258 4,696 11,954
Loan repayments (1,633) - (1,633)
Bond redemp�on (195) - (195)
New leases - 4,276 4,276
Lease repayment - (1,580) (1,580)
Other non-cash transac�ons - 152 152
Exchange rate differences (49) (92) (141)
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
253
NOTE 27 – BORROWINGS (continued)
Borrowings for the Company:
(in thousands of EUR)
Loans and
bonds
Liabili�es for
loans
Total
At January 1, 2023 5,608 4,051 9,659
Cash receipts 4,900 - 4,900
Loan repayments (1,332) - (1,332)
Bond redemp�on (248) - (248)
New leases - 1,923 1,923
Lease repayment - (1,035) (1,035)
Other non-cash transac�ons (745) (109) (854)
Exchange rate differences (241) (226) (467)
At December 31, 2023 7,942 4,604 12,546
At January 1, 2024 7,942 4,604 12,546
Cash receipts - - -
Loan repayments (1,633) - (1,633)
Bond redemp�on (257) - (257)
New leases - 4,276 4,276
Lease repayment - (1,530) (1,530)
Exchange rate differences (59) (92) (151)
At December 31, 2024 5,993 7,258 13,251
Loans are denominated in currencies as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
EUR
10,196
8,237
10,432
8,829
NOK
2,615
3,689
2,797
3,689
Other currencies
22
28
22
28
Total
12,833
11,954
13,251
12,546
The repayment plan for long-term loans is as follows:
Dalekovod Group Dalekovod d.d.
(in thousands of EUR) 2024 2023 2024 2023
Between 1 to 5 years
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
254
NOTE 28 – TRADE AND OTHER PAYABLES
Short-term liabilities
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
Domes�c trade payables
15,682
16,339
14,462
15,567
Foreign trade payables
16,168
13,932
8,809
9,575
31,850
30,271
23,271
25,142
Interest liabili�es
100
96
182
164
Accrued and other liabili�es
640
297
215
171
Financial liabili�es
32,590
30,664
23,668
25,477
Advances
16,937
13,017
14,260
10,450
Deferred income
8,840
5,513
8,840
5,414
Accrued expenses
602
906
602
906
Liabili�es towards employees
3,073
2,808
2,331
2,238
VAT payables
964
259
962
129
Taxes and contribu�ons
1,120
941
692
614
Unused vaca�on days
1,282
638
1,014
382
Other short-term liabili�es
81
70
78
66
Non-financial liabili�es
32,899
24,152
28,779
20,199
65,489
54,816
52,447
45,676
There are no long-term obligations to suppliers in 2024.
The Group's and the Company's short-term financial liabilities are denominated as follows:
Dalekovod Group
Dalekovod d.d.
(in thousands of EUR)
2024
2023
2024
2023
EUR
23,704
22,889
18,193
18,127
NOK
1,102
893
1,102
891
SEK
1,369
2,665
1,127
2,410
UAH
2,367
2,461
2,367
2,461
Other foreign currencies
4,243
1,756
1,074
1,588
Total
32,785
30,664
23,863
25,477
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
255
NOTE 29 - PROVISIONS
Group
(in thousands of EUR)
Jubilee awards
Severance
payments
Other
provisions
Total
At 1 January 2024
219
809
2,847
3,875
Increase
13
1,708
2,528
4,249
Decrease
(2)
-
(1,508)
(1,510)
At 31 December, 2024
230
2,517
3,867
6,614
Analysis:
2024
2023
Non-current por�on
1,869
3,286
Current por�on
4,745
589
Total
6,614
3,875
The Company
(in thousands of EUR)
Jubilee awards
Severance
payments
Other
provisions
Total
At 1 January 2024
117
529
2,834
3,480
Increase
4
1,655
2,519
4,178
Decrease
-
-
(1,496)
(1,496)
At 31 December, 2024
121
2,184
3,857
6,162
Analysis:
2024
2023
Non-current por�on
1,676
3,077
Current por�on
4,486
403
Total
6,162
3,480
Provisions for jubilee awards and retirement benefits and bonuses
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 fluctuation rate of 9.00% for the Group, and 11.8% for the Company (2023: Group 9.05%,
Company 11.8%), 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 (2023: 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).
Within the category for severance pay and bonuses, the Company calculated the cost for bonuses to
management in the amount of EUR 1,518 thousand, while the Group calculated the amount of EUR 1,653
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
256
NOTE 29 – PROVISIONS (continued)
Other provisions
Other provisions relate to provisions for litigation in the amount of EUR 1,389 thousand (in 2023 in the
amount of EUR 2,834 thousand) for the Company and EUR 1,399 thousand (2023: EUR 2,847 thousand)
for the Group, as well as provisions related to the dispute initiated by Hanfa in the amount of EUR 2,468
thousand for the Company and the Group.
Provisions for litigation refer to pending litigation and for the costs of litigation against the Company and
the Group. Based on the first-instance verdict, the claim was partially accepted in the dispute in Poland,
and during 2024 the provision for litigation in the amount of EUR 1,418 thousand was released.
Other provisions relate to liabilities under the misdemeanour dispute initiated by Hanfa against
Dalekovod d.d. By the first-instance verdict, Dalekovod d.d. was found guilty and fined EUR 3,703
thousand, or EUR 2,468 thousand, if paid within 30 days of becoming final. Based on this judgment, a
NOTE 30 - 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 normal commercial terms. In addition to the subsidiaries presented in Note 19, associates
presented in Note 20, 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 rještenja 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 owned in full by Končar – Elektroindustrije d.d. which is
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
257
NOTE 30 - RELATED PARTY TRANSACTIONS (continued)
Items in the income statement for the year and balances in the statement of financial position at the
end of the year that relates to subsidiaries are as follows:
Income and expenses
(in thousands of EUR)
2024
2023
Sales revenue
5,646
4,071
Rental income
1,177
777
Interest income
9
62
Other financial income
-
91
Income from profit sharing
905
978
Other opera�ng income
1,697
1,195
9,434
7,174
Costs of raw material and material
6,909
7,930
Subcontractor services
911
792
Other staff costs
33
198
Other opera�ng expenses
3,175
68
Interest expense and foreign exchange losses
23
37
11,051
9,025
In 2024, the methodology for calculating the fee for business cooperation and support services was
changed and new business cooperation agreements were concluded with all members of the
Dalekovod Group. The Company observes the significant activity of an individual organizational
unit/entity, according to which the share of completed work for an individual member of the
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
258
NOTE 30 - RELATED PARTY TRANSACTIONS (continued)
Receivables, liabili�es and loan
(in thousands of EUR)
2024
2023
Trade receivables
4,945
7,006
Receivables from subsidiaries for profit share
536
331
Impairment of trade receivables
-
(2,074)
Short-term deposits
41
38
Interest receivables
13
85
Advances
832
842
Loans receivable
307
733
Impairment of loans receivable
-
(292)
6,674
6,669
Trade payables
1,576
3,525
Interest payables
83
79
Accrued and other liabili�es
-
27
Bonds
430
493
Loans
182
191
2,271
4,315
Company transac�ons with Končar Group companies:
Income and expenses
(in thousands of EUR)
2024
2023
Sales revenue
231
1,438
231
1,438
Costs of goods sold
Costs of raw material and material
598
753
Subcontractor services
2,167
514
Other opera�ng expenses
248
40
Other employee expenses
20
2
3,033
1,309
Receivables, liabili�es and loan
(in thousands of EUR)
2024
2023
Trade receivables
98
423
Advances
191
380
289
803
Trade payables
1,408
785
1,408
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
259
NOTE 30 - RELATED PARTY TRANSACTIONS (continued)
Dalekovod Group transac�ons with Končar Group companies:
Income and expenditure
(in thousands of EUR)
2024
2023
Sales revenue
834
1,842
834
1,842
Costs of raw material and material
5,295
753
Subcontractor services
2,272
549
Other opera�ng expenses
265
42
Other employee expenses
27
3
7,859
1,347
Receivables, liabili�es and loan
(in thousands of EUR)
2024
2023
Trade receivables
332
492
Advances
1,128
380
1,460
872
Trade payables
1,561
792
1,561
792
Transactions with key management
Key management consists of Management Board, Executive Directors, and Heads of departments, 47
people in total (2023: 35 people). Remuneration to key management at Group’s level amounted to
EUR 5,110 thousand (2023: EUR 3,287 thousand), while remuneration at the level of the Company
amounted to EUR 4,018 thousand (2023: EUR 2,384 thousand).
Remuneration to Supervisory Board members in 2024 amounted to EUR 7 thousand (2023: EUR 7
DALEKOVOD d.d.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
260
NOTE 31 - CONTINGENCIES AND COMMITMENTS
As on 31 December 2024, the Group had concluded contracts whose performance had started, but has
not been completed. Undertaken obligations at the level of the Group that have yet to arise under
these agreements are estimated at EUR 239,095 thousand (2023: EUR 233,806 thousand).
As of December 31, 2024, 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 92,503 thousand and EUR 78,408 thousand (2023: EUR 57,021 thousand
for the Group and EUR 47,489 thousand for the Company). The Company is additionally exposed as a
co-debtor of subsidiaries in the total amount of EUR 12,552 thousand (2023: EUR 8,814 thousand). The
Group and the Company estimate that it is not probable that the contingent liabilities on account of
bank guarantees will be collected since the Group and the Company, just as in the previous periods,
have been meeting all their project-related contractual obligations.
During regular business operations, the Group was involved in several court proceedings, either as the
plaintiff or the respondent. In the opinion of the Management and legal consultant, a provision is made
for those disputes that will potentially result in a loss (Note 30). In addition to the disputes for which
reservations have been made, there are also court proceedings which, in the opinion of the Board and
NOTE 32 - EVENTS AFTER THE REPORTING DATE
Payment based on reservation
During 2025, the payment was made on the basis of provisions, as detailed in note 29 to the financial
statements.