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Annual Report 2025
Ericsson Nikola Tesla
Creating a sustainable future
inspired by technology
Management
report
Sustainability
report
Financial statements report
Table of contents
Management
report
Sustainability
report
Financial
statements
report
2
Table of contents
Management
report
Sustainability
report
Financial
statements
report
2
Management
report
Ericsson Nikola Tesla group in brief
Highlights 2025
Statement by the President of Ericsson Nikola Tesla
Business situation in major markets
Business responsibilities and activities
Products and services
Scientic and research activities
Important events 2025
Awards
Memberships
Financial highlights
Information for shareholders
3
4
7
8
10
11
12
13
15
17
18
19
23
Sustainability
report
ESRS 2 - General disclosures
Basis for preparation of report
BP-1 General basis for preparation of sustainability statements
BP-2 
Governance
Strategy
Material impacts, risks and oportunities
Environment
Key Performance Indicators in line with the EU Taxonomy
ESRS E1 Climate change
Social
ESRS S1 Own workforce
ESRS S4 Consumers and end-users
Governance
ESRS G1 Business conduct
Statement on the application of the Corporate Governance
Independent Auditors’ Limited Assurance Report
26
27
27
27
28
30
44
47
71
72
77
84
85
99
102
103
109
113
115
116
116
Finantional statements
report
Consolidated Financial statements report

Responsibilities of the Management and Supervisory Board
for the preparation and approval of the annual consolidated

Independent Auditors’ Report
Statement of comprehensive income

Consolidated statement of changes in equity

Financial statements of Ericsson Nikola Tesla d.d.

Responsibilities of the Management and Supervisory Boards

statements
Independent Auditors’ Report
Statement of comprehensive income

Statement of changes in equity


Table of contents
118
118
122
122
123
125
148
150
150
154
154
156
155
157
148
Table of contents
Management
report
Sustainability
report
Financial
statements
report
3
Management
report
Ericsson Nikola Tesla group in brief
Highlights 2025
Statement by the President of Ericsson Nikola Tesla
Business situation in major markets
Business responsibilities and activities
Products and services
Scientic and research activities
Important events 2025
Awards
Memberships
Financial highlights
Information for shareholders
3
4
7
8
10
11
12
13
15
17
18
19
23
Table of contents
Management
report
Sustainability
report
Financial
statements
report
4
Ericsson Nikola Tesla Group
in brief
Parent company: Ericsson NIkola Tesla d.d.
Core business: Provider of modern information and communications
products, solutions, software and services
Address Krapinska 45, p.p. 93, HR-10 002 Zagreb
Ulica Domovinskog rata 61a, HR-21 000 Split
Ulica Hrvatske Republike 29, HR-31 000 Osijek
Vukovarska ul. 7A, HR-51000 Rijeka
Telephone Zagreb / +385 1 36 53 535
Split / +385 21 20 58 00
Osijek / +385 1 36 53 535
Fax Zagreb / +385 1 36 53 156
Split / +385 21 43 58 34
Osijek / +385 1 36 53 156
E-mail ent.company@ericssonnikolatesla.com
pravni.poslovi@ericssonnikolatesla.com
Web https://www.ericssonnikolatesla.com
Personal identication
number (OIB)
84214771175
Commercial court reg.no. (MBS) 080002028
Statistical number (MBPS) 3272699
Share capital EUR 17.674.030,00
Number of shares 1,331.650 registered shares
Ownership structure LM Ericsson 49.07%,
other shareholders 49.55%
treasury shares 1.38%

IBAN RBA HR7624840081100331673
ZABA HR8423600001101235687
PBZ HR2223400091110012058
ERSTE HR8824020061100414168
OTP HR5324070001024070003
Management Board 
Management Board

the Management Board
-
ment Board
-

Chairperson of the
Supervisory Board
Luca Orsini

 
Table of contents
Management
report
Sustainability
report
Financial
statements
report
5
Subsidiaries and branch oces
Ericsson Nikola Tesla Servisi d.o.o.
Address Krapinska 45, HR-10 002 Zagreb
Telephone +385 1 30 38 890
Fax +385 1 30 38 601
E-mail entservisi@ericssonnikolatesla.com
Web https://ericssonnikolatesla.com/en/
about-us/subsidiaries/
Personal identication
number (OIB)
47445593925
Commercial court
registration number
(MBS)
080921748
Ownership structure Ericsson Nikola Tesla d.d. 100 percent
IBAN RBA HR2124840081107008882
ZABA HR4723600001102860133
ESB HR7324020061100756266
Core business: Provider of network
infrastructure build and maintenance services
Ericsson Nikola Tesla BH d.o.o.
Address Ulica kralja Petra Krešimira IV,
Lamela B-bb, Mostar, Bosna i
Hercegovina
Telephone +387 36 446 492
Fax +387 36 446 494
Web https://ericssonnikolatesla.com/en/
about-us/subsidiaries/
Unique identication
number (JIB)
4201717070003
Commercial court
registration
number (MBS)
58-01-0534-18
Ownership
structure
Ericsson Nikola Tesla d.d. 100 percent
IBAN UniCredit Bank
BA393386904896538387

BA391611000002324857
Sparkasse Bank
BA391995320006014921
Director 
Core business: Provider of modern information and communications
products, solutions, software and services
Branch oce Sarajevo
Address 
Bosna i Hercegovina
Telephone +387 33 252 260
Fax +387 33 209 419
Unique identication
number (JIB)
4201717070011
Director 
Table of contents
Management
report
Sustainability
report
Financial
statements
report
6
Libratel d.o.o.
Ericsson Nikola Tesla d.d. – Branch
oce Kosovo
ENT - Branch oce Cyprus
Address Selska 93, HR-10 002 Zagreb
Telephone +385 1 36 54 035
Fax +385 1 36 54 038
E-mail libratel@libratel.hr
Web www.libratel.hr
Personal
identication
number (OIB)
97566215530
Commercial court
registration
number
(MBS)
080300404
Ownership
structure
Ericsson Nikola Tesla d.d. 100 percent
IBAN ZABA HR7623600001101211096
Address Vicianum, Arbëria 3 - Veranda C2.7,
lokali Nr.1/A, 10000 Priština, Republika
Kosovo
Telephone +381 38 749 080
Unique identication
number
(JIB):
810801200
Fiscal number
(PDV ID)
600411235
Business number 70633647
Ownership
structure
Ericsson Nikola Tesla d.d. 100 percent
Director Besar Spahija
Address Themistokli Dervi, 41


1065 Nicosia
Cyprus
Tax number (PDV ID) 652266
Registration
number
39233543
Ownership
structure
Ericsson Nikola Tesla d.d. 100 percent
Core business: Provider of telecom services; installation, putting


Core business: Provider of modern information and communications
products, solutions, software and services
Table of contents
Management
report
Sustainability
report
Financial
statements
report
7
Highlights 2025
238.6 MEUR

Sales revenue
17. 7 MEUR


11.9%

Gross margin
17.5 MEUR


operating
activities
28.3 MEUR


20.9 MEUR


72.9%
The share of export
in total revenue
• Strengthening technology
leadership, innovation capacity
and deepening cooperation with
customers, partners, academic
community and relevant
institutions
• 
technology partner to domestic
and regional operators and
institutional clients
• 
the Digital Society segment
• Excellence in services to
Ericsson, which encompass
Research & Development
and Services & Solutions for
Customers
• 
targets and further digital
transformation of the company
with the application of the
highest business standards
• Strong focus on continuous
development of talents and
company culture
Table of contents
Management
report
Sustainability
report
Financial
statements
report
8
Statement by the President
of the Management Board of
Ericsson Nikola Tesla
In 2025, Ericsson Nikola Tesla Group achieved
stable results and conrmed the capability to
successfully achieve targets in a dynamic market and
technological environment.
In line with the global trends, we have continued
to invest in digital transformation, including the
application of articial intelligence and automation of
business processes, strengthening cyber security,
development of new products and services, and
competencies of our employees. These activities are
our response to the ever-increasing changes that
require a high level of adaptability, innovation and
agile decision making.
Business results and markets
The total revenue of ENT Group in 2025 amounted to EUR 238.6 million,
down by 4.4% year-over-year. The decline in revenue is primarily the
result of lower activity in export markets and somewhat weaker
demand in the domestic market. At the same time, revenue growth
in the Services to Ericsson segment and the further strengthening

pressures and contributed to the overall stability of the business.
In the domestic telecommunication market, we have continued
a strong technological momentum by implementing projects of

the operators’ network architecture. With Hrvatski Telekom, the

continued. Furthermore, a new 5-year exclusive contract was
signed regarding microwave technologies. With A1 Hrvatska we

and the expansion of 5G capacity, with a strong focus on resources

functionalities.
In the Digital Society segment, we have continued the strategic
projects of digital transformation of public administration and key
national systems. New contracts with government institutions have

and inter-operable digital platforms and moder public e-services.
In export markets, we have maintained a strong technical and

Montenegro and Kosovo. Early completion of a major project in Kosovo
had an impact on the total revenue, however the activities of mobile

have continued. Services to Ericsson segment additionally grew, and

partner in the development of advanced network functionalities,
including 5G/6G RAN software and the associated network algorithms.
Customer Services and Solutions Center successfully delivered

of expertise of ENT teams.
The evolution of technology and
innovations
In the period ahead of us, advanced communication infrastructure,

increasingly shape the development of the economy and society. Cyber
security is evolving from a technical into a strategic issue, while energy

elements of digital ecosystems sustainability. Global trends show an

have been evolving from static systems into intelligent platforms


integration of communication technologies and sensors opens an
opportunity for smart cities, industrial automation, digital healthcare
and numerous solutions that will mark the coming decade.
In this context, ENT has been actively contributing to global
technological progress. Our R&D Center, in collaboration with
Ericsson global community, is developing key functionalities of
modern telecommunication networks and future technologies. At the
same time, ICT solutions that we have been developing for critical
infrastructure - healthcare, land registry, public and national safety,

further development of the digital transformation of industry and
society.
Resilience, risks and responsibility
Dynamic environment in which we are doing business demands
disciplined cost management, technology leadership and high level of
operational agility. We build our resilience through consistent value
delivery to our customers, continuous digital transformation and
investments in technological excellence.

Table of contents
Management
report
Sustainability
report
Financial
statements
report
9
Long-term, well-structured cooperation between the economy
and the academic community is a key prerequisite for the creation
of new opportunities and the development of solutions that shape
the future.
Outlook
In the coming period, Ericsson Nikola Tesla will continue to
strengthen technology leadership, innovation capabilities and
strategic partnerships. As a company that has been leading
society’s digital transformation for decades, we will continue to
actively contribute to strengthening the economic, technological

Our goal is clear - to develop sustainable, secure and advanced
technological solutions that advance the quality of life, strengthen
industries and enable the development of digital society we strive
for.

with the contracted business and new market opportunities, will
ensure additional growth and further strengthen the position of
Ericsson Nikola Tesla Group as one of the key stakeholders of ICT
sector in Croatia and in the region.
Integrity and responsible business are the foundation of
our operations. We apply the principle of Zero tolerance for
corruption, and we have been systematically strengthening
employees’ awareness on the importance of ethical and
professional standards. The Supervisory Board, Audit Committee
and Executive Management continuously monitor key risks and
compliance issues in order to ensure business stability.
People, knowledge and
partnerships
As the biggest ICT company in Croatia, we gather the largest
community of top experts in Croatia and the region. Knowledge,
motivation and dedication of our experts are key in creating
technologies and solutions with long-term value for society and
the economy.
Therefore, we have been continuously investing in the
development of their competencies, strengthening innovative
potential and partnerships across the entire ecosystem.
Collaboration with the academic community remains one of the key
drivers of innovation. Last year the 24th edition of ENT Summer
Camp was held, and Inventorium Day 2025 additionally strengthened
our partnership with the Faculty of Electrical Engineering and
Computing, where we have been jointly developing projects in the


Table of contents
Management
report
Sustainability
report
Financial
statements
report
10
Business situation in major
markets
In the domestic market, sales revenue amounted to EUR 64.7

Ericsson Nikola Tesla continued its successful cooperation with its strategic
partner Hrvatski Telekom through the implementation of multi-year contracts
covering deliveries and services in the areas of the radio segment of the
mobile network, microwave technology, and 4G/5G core network. In Q1, a new
5-year contract was signed, according to which ENT will be the exclusive
supplier of Hrvatski Telekom for microwave equipment for the next 5 years.

mobile network continued, including the implementation of Ericsson’s dual-mode
5G Core solution and preparations for the introduction of the 5G standalone


real-time monitoring of 4G/5G RAN network performance.
With our strategic partner A1 Hrvatska, in line with multi-year contracts, the

as well as in expanding coverage and increasing 5G radio network capacity,
with the aim of improving service quality and user experience. At the same


readiness of the network for the introduction of new digital and 5G services.

undertaken.
In the business segment Digital Society, we have signed many new contracts
with key customers on the domestic market. We would like to highlight the
contract with the Ministry of the Interior of the Republic of Croatia related to
the maintenance of stationary and mobile systems for surveillance of the EU’s
external border; the two-year contract with the State Geodetic Administration
and the Ministry of Justice, Public Administration and Digital Transformation
for the maintenance of the Joint Information System of Land Registry and





electronic communications infrastructure.
In export markets 

decline is primarily the result of the completion of a major mobile network

November 2024, six months before the contracted deadline.

Mostar network through a range of activities aimed at improving quality and
increasing network capacity. Main priorities included the expansion of the LTE

management systems.

network in the segment of microwave transmission systems.

the mobile network by delivering equipment and services based on multi-year
contracts covering both the radio and core part of the network. A special
focus was on the implementation of Ericsson dual mode 5G Core network, which
secures high technological readiness for the introduction of advanced 5G
services.

mobile network through continuous maintenance and upgrades of the core,
radio, and transmission infrastructure, as well as software and hardware
expansions of the 4G/5G radio and transport network. With the operator IPKO,


network. These activities ensured network stability, increased capacity, and
technological readiness for the further development of advanced 5G services.

the land administration information system of the Department of Lands and
Surveys of the Republic of Cyprus.
In Ericsson market, sales revenue remained at the same level year-

year-over-year.
The ENT R&D Center has had a successful year marked by growth,

Ericsson’s global ecosystem. During the year, the team was strengthened

in key areas of network technologies. Particularly noteworthy is the
contribution to the development of advanced RAN functionalities which
have played an important role in the evolution of the 5G portfolio. R&D
teams delivered a range of functionalities that directly contribute to

ability to take on and execute demanding development tasks within
network software.
Experts from the Customer Services and Solutions Center, in addition
to engagement for the customers of Ericsson Nikola Tesla Group, were
also engaged on many projects for Ericsson customers. Activities include

and integration of networks for mobile operators across numerous EU
member states, as well as in other countries globally. These are complex
projects that, among other activities, included the introduction of 5G
technology, operational and business support systems, as well as projects
for the introduction of core solutions in Cloud. Activities also continued
on the development and implementation of software tools for mobile

among other things, AI technology.
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Business responsibilities
and activities
Ericsson Nikola Tesla d.d.
Ericsson Nikola Tesla is a regional supplier of communication
products, innovative ICT solutions and related services and the
largest ICT company in Croatia.
The company has a strong Research & Development Center,
as well as many Services & Solutions Centers. The company
also provides a modern test environment which enables
quality testing of the operators’ networks and testing for the
internal users’ requirements. It is among the leading exporters
in Croatia, and number one when it comes to exporting ICT
software development services.
The company successfully responds to customers’ demands
and needs by combining an advanced Ericsson portfolio with an
innovative portfolio of Ericsson Nikola Tesla.
The company’s main activities encompass:
• research and development, software development and other
services
• creating and implementing e2e ICT solutions for
communications service providers
• ICT solutions for Digital Society
• local, regional, and global service provisioning
• marketing and sales network.
Ericsson Nikola Tesla Servisi d.o.o.
The core business of Ericsson Nikola Tesla Servisi is
providing services related to design, geodesy and project

segment of planning and designing electronic communication
infrastructure and solar power plants, as well as providing
geodetic services: ISO 9001:2015, ISO 14001:2015, ISO 27001:2013
and ISO 45001:2018.
The company’s activities are:
 electronic communication infrastructure planning and design
services
 planning, designing and constructing solar power plants
 cadastral survey
 geodetic services for design, construction and maintenance
• project management
Libratel d.o.o.
Libratel’s core business is providing telecom services;
installing, putting into service and upgrading telecom equipment

Ericsson Nikola Tesla BH d.o.o.
The company operates on the market of Bosnia and

Ericsson Nikola Tesla Group.
Ericsson Nikola Tesla d.d. – Branch oce
Kosovo


Branch Oce Cipar


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Products and
services
In the telecommunication segment, the Group delivers an entire
range of ICT products, solutions and services of Ericsson Nikola
Tesla, Ericsson, and other selected providers.


e2e solutions for radio, transmission and core networks, and

such as mission-critical communication and media solutions.


telecommunications infrastructure, networks integration and

Our research and development center, the largest center for

services of software development, thus covering all the phases -


in a range of industries and programming environments/languages.
Owing to long-term investments in the development of domain-

both from Croatian and foreign markets, we provide our
customers and partners with strategic solutions for the overall
digital transformation. Our approach includes in-depth analysis

and technical demands and the application of modern digital
technologies through design, development, implementation and
integration of solutions, with ongoing support, maintenance and
further development during the solution’s entire life cycle.
We carry out digital transformation in the areas of healthcare,
land administration, public administration, transport, public and
national security and sustainability, and smart energy management,
whereby a special emphasis is placed on the development of
scalable, interoperable and secure solutions that create long-

sustainable growth of our users and partners.

implementation and integration to maintenance.
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
strategic goals and primarily focused on applied research and
the implementation of new technologies in areas of interest.

of Ericsson Nikola Tesla’s Research Unit and the Institute for
Telecommunications and Informatics, which bring together experts,
Doctors of Science and doctoral students in multidisciplinary

a tradition of more than six decades, represent a generator of
knowledge and innovations.
Research activities include the company’s research and
collaborative projects with academic and industrial partners in
Croatia and abroad. During 2025, cooperation with the Faculty of
Electrical Engineering and Computing of the University of Zagreb

Furthermore, collaboration also continued with the Faculty


the joint laboratories with the Faculty of Electrical Engineering,

and the Faculty of Electrical Engineering, Computer Science and


Systems, Augmented and Mixed Reality Systems, Internet of Things,
and especially on the application of Machine Learning methods and

The research and development activities encompassed several
complementary areas focused on advanced data exploitation and
development of modern analytical solutions. The activities were
carried out grouped in several topics, with a shared focus on
linking multidisciplinary expertise and domain knowledge with the
application of advanced methods and new technologies, with the aim
of developing solutions that can be scaled according to user needs.
Part of the activities was dedicated to analytics of satellite and
geolocation data, where the work focused on model development
for detection of spatial changes, monitoring urban and climate
patterns, as well as strengthening the support for environmental
protection and sustainable space management. Part of the
activities was focused on developing methods to improve reliability
as the foundation for advanced AI-supported systems which
combine geospatial and sensor data with the purpose of security,

domains, prototypes and modules were developed for intelligent

anomalies in complex processes.
The activities on the following EU co-funded research projects
continued:
• 

from the program H2020. At the beginning of the year the project

with other energy services, focusing on contracting energy
characteristics and creating new revenue streams for the local
government.
• 
Cross-Border Federation of Data, grant #101070214, https://

completed in December. The project started in 2022 with the
aim to establish a green, secure and reliable framework that
would respect privacy, aggregate various interdisciplinary data


will take into consideration other European spaces to join data
and transnational initiatives. ENT lead the activities related to

development of the system component enabling connectivity with
the Copernicus program data space, in addition to contributing
to other activities, from which we would like to highlight the


reviews and pilot program.
• DIGIPHY 


implementation of IoT platform in ENT environment, design of
private 5G network, the development of adapters for device
monitoring and documentation preparation with a focus on QoS/

to research and design technologies that enable immersive and

interaction, as well as the remote presence and interaction of
Scientic and research activities
Table of contents
Management
report
Sustainability
report
Financial
statements
report
14
persons and objects in the visual representation of a dynamically


• OLGA 

work continued in the domain of “green airports” and smart

airport processes. A special focus of ENT’s team was working on
solutions for the sustainability of the Zagreb airport building, as

• The activities that contribute to strengthening the innovation
ecosystem and transferring knowledge into practice have also
continued.
• The activities that contribute to strengthening the innovation
ecosystem and transferring knowledge into practice have also
continued.
• 


encompassed the private and the public sector in the Adriatic
Croatia, with networking and synergistic cooperation throughout
entire Croatia and with other EDIHs in the EU. Activities included
testing before investments, training in the digital skills domain,

• 

to provide a comprehensive support to companies and public
entities with advanced services and technologies based on

health care systems for digital transformation. The services are
related to the development of innovations in digital health care,

strategic topics in digital health care, and education.
• ENT Summer Camp continued as a platform for addressing
challenges related to industry and society, as well as providing
student mentorship and connection with research projects.
Ericsson Nikola Tesla Summer Camp was held for the 24th time,


in Zagreb, Split and Osijek, ENT Summer Camp has continued
its tradition as a strategic platform for talent development,
fostering cooperation between the academic community and
industry. Initiated in 2001 in cooperation with the Zagreb Faculty

Zagreb, in 2025 it encompassed students from 16 faculties
from Croatia and abroad. On this occasion 43 students, led by
48 experienced ENT mentors, worked on 15 innovative projects


real industrial and social challenges. The mentors had a key

the quality of results. The motto of this year’s camp, Bright

to developing future ICT experts and fostering innovation. The
students worked in multidisciplinary teams, with the support
of the adjusted hardware and software environments and
continuous feedback mechanisms. Satisfaction and motivation
were monitored through weekly surveys, while the project
activities were overseen by the Summer Camp Steering
Committee, composed of the representatives of FER, FESB and
ENT, securing the quality of projects and their compliance. In
addition, ENT Summer Camp included the structured program of
workshops aimed at strengthening soft skills and professional

resolution, career development and mental health. ENT Summer
Camp 2025 ended with a ceremony held on 12 September
2025 at the headquarters of Ericsson Nikola Tesla in Zagreb.
The students presented their work to ENT employees and
stakeholders, and many expressed interest to continue the
research or joining ENT initiatives after the Camp. The event
gathered more than 110 participants, including students,
mentors, representatives of faculties and ENT’s leadership. The
project presentations were shown to all employees in Zagreb
and selected members of the academic community. Awards were
presented to the students and partner faculties, and the closing
message highlighted the camp’s role in shaping a smarter, more

ENT’s strategic commitment to cooperation with the academia
which is the fundamental part of our identity, and its contribution
to the quality of education and the development of future
leaders. At the ceremony held on December 11, 2025, in Zagreb,
ENT Summer Camp received an Award for the best student
program at the event Best Employer Brand Awards Adria 2025.
ENT Summer Camp is one of the longest-running and most
comprehensive student programs in the ICT sector in the region,
in which more than 1,100 students have participated to date.
• In 2025, Inventorium was a central place for demos, joint
workshops and discussions with academic partners. Inventorium
Day 2025 was held on November 20, 2025, with the introduction

and Professor Veran Bilas, PhD, Dean of FER, with the review
of equipment and activities, and highlighting the selected joint
projects and results. In 2025, two more ENT’s employees have
obtained their Doctor of Science title. Several articles were
published on international conferences, and our experts
participated in various activities of conferences in Croatia

a solid foundation for the further development of modern and
applicable solutions.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
15
Important events 2025
January– March
• Two groups of students from the Faculty of Electrical

where the experts from the Customer Services & Solutions and
R&D Radio department presented the latest technologies and
projects.
• 
panel “Employers with a vision”, highlighting trends in the labor
market in regard to the ICT sector.
• 
• Contracts worth EUR 2.7 million were signed with HT Mostar:
software management, expansion of the radio access network,
VoLTE.
• 


• 
transformation and mobile networks worth more than EUR 6

upgrade of the Joint Information System of Land Registry and
Cadaster for the State Geodetic Administration, hospital and
business information system; ESG platform, communication
systems, Mini-Link contract with BH Telecom.
• 

Health event.
• In cooperation with Crnogorski Telekom, the testing of 5G+

• ENT team participated at the Mobile World Congress 2025 led by
the members of the Management Board and sales directors, held
meetings with partners and introduced Ericsson innovations to
customers.
• Signing of new contracts worth almost EUR 8 million: 5-year
contract for the microwave equipment with Hrvatski Telekom,
contract on the maintenance of IPKO’s mobile network, and
contracts with the Ministry of the Interior of the Republic of

• ENT AI Hackathon was held, a two-day competition that gathered
more than 150 participants.
• ENT participated at an international conference NAPCORE about

• ENT experts held guest lectures at Faculty of Electrical



April – June
• 
discussions on eTreatment within the Congress of Healthcare

Medical Law.
• ENT hosted 30 international students of the BEST seminar on
sustainability.
• 

of Passive Communications Infrastructure, the ultimate goal of
which is to reduce the digital gap between urban and rural areas.
• ENT’s Supervisory Board appointed the new Management Board


Board and the Director of Customer Solutions and Services,

Director of Finance, Sourcing and Commercial Management, Milan

Strategy and Business Development.
• ENT Researchers, Assoc. Prof. Goran Molnar, PhD, and Marko

conference in Stockholm.
• ENT participated at the Mostar Fair and presented the solutions
for digital transition.
• ENT took part in MUZZA Science Week in order to stimulate the
interest of children and youth in STEM.
• 
• Management Board and Supervisory Board proposed the dividend
payment of EUR 10.54 per share.
• ENT Summer Camp 2025 applications opened with a motto “Bright
Minds Creating a Brighter Future”.
• ENT hosted more than 50 students from the Faculty of Geodesy,
University of Zagreb.
• ENT participated at Job Fair at FER, where a lecture was held by
Tomislav Štefanec, Network Development Manager.
• Contracts were signed worth more than EUR 18 million in the

the 112 system of Montenegro and business communication solutions.
• ENT participated at DUMP Days at Faculty of Electrical Engineering,

• 
Manager, spoke at the MBT conference.
• First part of ENT Technology Days was held.
• ENT hosted the delegation form HT Mostar and the Ministry of
Transport and Communications of BiH, led by the Minister Andrijana

• ENT supported the conference Innovative Croatia 2025 and presented


• The program for acquiring own shares started.
• 

• 
• 
Manager, was a keynote speaker.
• ENT’s Technology Days were visited by the President of the Republic of

July – September
• During the second part of the Technology Days, the company was
visited by the Deputy Prime Minister and Minister of Defense of the


associates, as well as other distinguished representatives of public
administration bodies.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
16
• ENT and Hrvatski Telekom have jointly secured quality mobile
connections at a big concert held at Hippodrome.
• ENT Summer Camp 2025 started at three locations.
• The results for H1 2025 were reported.
• 
and business communications systems worth more than EUR 11
million.
• 
Manager, about the concept of Digital Airspace.
• According to the analysis of Dun & Bradstreet Croatia ENT was

• 
Communication and Interaction Within a Dynamically Updated
Digital Twin of a Smart Space: Conceptual Framework and
Research Challenges” related to the EU co-funded Digiphy
Project in which experts from Ericsson Nikola Tesla are also
participating.
• 
in a panel titled: ”Smart Roads and Digital Safety” within the

• ENT Summer Camp closing ceremony was held.
• New contracts with HT Mostar were signed, worth EUR 1.5 million.
• 
from the position of President of the Management Board as of

• October-December
 Notice of the Extraordinary General Meeting of Ericsson
Nikola Tesla was published.
 
and digital transformation worth approximately EUR 8.5
million. On the Kosovo market, several contracts related

mobile networks were signed with the operators IPKO
and Telekom Kosovo. A number of contracts were also

of public administration, hospital IT systems, national and
public security, and tourism, as well as related to business
communications systems in the Croatian and export
markets.
 
the Faculty of Electrical Engineering, Computer Science and

held by Leo Tumbas, ENT engineer.
 ENT experts participated at the conference KosICT in
Priština. Marin Vukosav, Embedded Software Engineer, held a
lecture about AI in Telco.
 In ENT R&D, a 5-day workshop was held on machine learning,

 
Director of Finance, Sourcing and Commercial Management,
participated at HBOR conference on the future of export.
 
about digital innovations at the conference Game Changer 4.0.
 
 ENT Researchers, Assoc. Prof. Goran Molnar, PhD, and

International Symposium on Image and Signal Processing and

 
of ENT and the President of the Economic Council of the
University of Zagreb, participated at the Economic Forum
of the University of Zagreb, titled: “Competitive and Resilient
Croatia”. He also participated at PMI Forum 2025.
 On November 14, Extraordinary General Meeting was held.
 


 Inventorium Day 2025 was held, highlighting cooperation
between ENT and FER.
 At FER Day, the best student papers were awarded by ENT,

 President of ENT Management Board held a lecture at FER
Connect, a traditional gathering of alumni and students of
FER.
 ENT experts held lectures at FERIT and MATHOS, as well as lab
exercise for students of FER in ENT Inventorium.
 
and Chief Legal Counsel as well as a member of Leadership
Team, became a new member of the Management Board of
ENT.
 ENT participated in Career Speed Dating at FER.
 
Management Board and Director of Strategy and Business

31, 2026.
 During December, an end of a successful business year
was marked with a traditional reception for business
partners, as well as Advent gatherings for employees and
entertainment programs for their children in Zagreb, Split,
and Osijek.
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17
Awards
June
• On the occasion of the ceremonial session and celebration of
the 65th anniversary of the Faculty of Electrical Engineering,

Split, Ericsson Nikola Tesla, as the company that employed
the largest number of students who completed some of the

appreciation, which was received on behalf of the company

September
• At the conference “IPO as an Opportunity for Long-Term
Owners and Growth through the Capital Market”, jointly


Ericsson Nikola Tesla was awarded for the best compliance
with the Corporate Governance Code in 2024 among the
companies listed on the Regular Market of the Zagreb Stock
Exchange.
• At the Compliance Conference 2025, our company won the
prestigious award The Best in Compliance in the category
Best Third-Party Compliance Program.
October
• 
Croatian Chamber of Economy awarded the Golden Marten

the Management Board of Ericsson Nikola Tesla.
December
• At the Best Employer Brand Awards Adria 2025 ceremony,
Ericsson Nikola Tesla won two awards: for the best employer
brand in the technology sector and for the best student

leading employers in the region. The awards were accepted

Corporate Social Responsibility.
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18
Memberships
During the reporting period, ENT Group’s experts have been
actively participating in the work of various professional

knowledge transfer, monitoring of relevant trends and more



secures a high level of expert contribution in the development

practice.
ENT Group contributes to the work of more than 70

Croatian Employers’ Association, the Croatian Chamber of


Standards Institute, Institute of Electrical and Electronics


In addition to professional cooperation, Ericsson Nikola Tesla
also actively participates in socially important initiatives
of public interest, among which the UNICEF’s Think Tank on
children’s rights and CSR, and HR PSOR Diversity Charter,

commitment to promoting responsible business practices,
sustainable development and an inclusive society.
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Ericsson Nikola Tesla Group
Ericsson Nikola Tesla d.d.
2025 2024 2023
Statement of comprehensive income and cash ow
items (in EUR million)
Sales revenue
239 249 304
Selling and Administration expenses
-13 -12 -13

21 22 25

18 16 22

18 10 17
Year-end position (in EUR million)
Total assets
170 180 193

52 63 77
Capital employed
83 82 87
Equity
70 68 72
Per share indicators

13 12 17
Dividends per share
EUR 13.52 EUR 10.54 EUR 15

1,328 1,326 1,323
Other information (in EUR million)
Additions to property, plant and equipment
2 3 2
Depreciation of property, plant and equipment
3 3 3
Alternative Performance Measures (APMs)
Gross margin
11.9% 11.4% 10.5%
Operating margin
8.8% 8.9% 8.1%
EBITDA Margin
10.9% 11.0% 10.1%

25.4% 22.9% 30.6%

21.4% 19.1% 25.6%

7.4% 6.3% 7.3%
Equity ratio
41.0% 37.9% 37.6%
Capital turnover
2.9 3.1 3.5
Current ratio
1.6 1.5 1.5
P/E ratio
14.2 15.6 11.9
2025 2024 2023
233 243 232
-12 -12 -11
21 29 21
17 22 19
19 11 6
158 166 163
44 54 60
77 77 75
64 63 61
13 17 14
EUR 13.52 EUR 10.54 EUR 15
1,328 1,326 1,323
2 3 2
3 3 3
12.0% 11.3% 11.2%
8.8% 12.0% 8.9%
11.0% 14.1% 10.8%
26.9% 35.7% 31.1%
22.3% 29.3% 25.2%
7.4% 9.2% 8.1%
40.8% 37.9% 37.1%
3.0 3.2 3.1
1.6 1.5 1.5
14.6 10.8 14.0
Financial
highlights in
2025
* As proposed by the Management Board and Supervisory Board
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0
18
50
19
100
20
150
22
21
23
200
24
250
25
30%
20%
10%
0%
300
350
400
2024
2024 20252023
2025
Equity
Operating prot
Liabilities
Return on sales (ROS)
Non-current assets
Gros margin
Other current assets
Return on capital em-
ployed (ROCE)
Cash, cash equivalents
and liquid nancial
assets
63
52
82
86
34
33
112
101
68
70
Balance sheet
structure
(in MEUR)
Operating
prot (in MEUR)
Gross margin,
ROCE and ROS (in
percentages)
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Development of
liquid assets and
operating cash
ow
Change in liquid
assets

Cash and cash
equivalents
Liquid nancial
assets
Operating cash ow
47
17.5
-2.3
0.3
63.1
73
21
25
22
59
5
4 4
2023 2024 2025
-26.7
52
-17.7%
2024 end Operating
activities
Investing
activities
Financial
activities
other 2025 end
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22
Export
Domestic
Ericsson
2024 20252023
11%
43%
46%
56%
59%
27% 27%
17% 14%
20%
0%
40%
60%
80%
100%
Sales revenue
by market
in percentages
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23
Information for
shareholders
Shares of Ericsson Nikola Tesla d.d. are traded in the
Regular Market of the Zagreb Stock Exchange under the
symbol ERNT-R-A.
The Croatian Financial Services Supervisory Agency
(HANFA) awarded the company for the best compliance
with the Code of Corporate Governance among the
issuers on the Regular Market of the Zagreb Stock
Exchange.
Ericsson Nikola Tesla d.d. share price
movement in 2025
The regular turnover of Ericsson Nikola Tesla’s share was EUR 13.6
million, which is lower compared to EUR 22.0 million in 2024. In block


During the year, the share price increased by 3.54% and ended the
year at EUR 190.0. At the end of 2025, Ericsson Nikola Tesla’s market



Exchange with EUR 125.4 million, which represents 1.4 % of the total


Development on the Zagreb Stock Exchange in 2025

turnover within the orderbook increased by almost 76%, ETFs increased by

shares increased by 11%, while the ETF market recorded a strong increase


ERNT share price and turnover 2021-2025
ERNT-R-A Share price and
turnover
2021 2022 2023 2024 2024
 258.8 270.8 255.0 226.0 203.0
 199.1 187.8 191.5 177.0 165.0
 239.4 226.3 199.0 183.5 190.0

within the orderbook
11.2 11.0 11.1 22.0 13.6

block transactions
4.44 0.91 0.27 1.7 0.53
trade volume - within the
orderbook
50.525 47.841 52.579 110.328 72.389
trade volume - block trans-
actions
19.638 4.171 1.250 8.950 2.968
 8.5 6 15 10.54 13.52*
*Dividend proposal submitted to the Annual General Meeting of the
joint-stock company Ericsson Nikola Tesla
continuation of the long-term positive trend on the domestic capital
market.

have achieved double digits returns during the year. The range of annual









return.
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ERNT-R-A share turnover and average price
trend in 2025 (in EUR) (graph 02)
Share capital
As at December 31, 2025, Ericsson Nikola Tesla joint-stock company
had a share capital amounting to EUR 17,674,030.00 divided into 1,331,650
ordinary shares without the nominal value. Each share carries one vote
at the company’s Annual General Meeting. On the same day, the total
number of treasury shares was 18.387, representing 1.38 % of the share
capital. The shares were owned by 6,885 shareholders.
Shareholders
Ericsson Nikola Tesla d.d. major shareholders as at 31 December 2025.
Shareholders
Number
of
shares
% of
share
capital
Telefonaktiebolaget LM Ericsson 653,473 49.07

fond kategorija B
123,514 9.28
 24,952 1.87
Ericsson Nikola Tesla d.d. 18,387 1.38

dobrovoljni mirovinski fond
18,360 1.38

javnom ponudom
11,245 0.84

fond kategorije A
6,523 0.49
Erste & Steiermarkische Bank d.d. / CSC 4,963 0.37


4,706 0.35
Agram Brokeri d.d., /Zec Branislav 3,333 0.25
Other shareholders 462,194 34.71
ERNT-R-A share turnover and average
price trend 2021 - 2025 (in EUR) (graph 01)
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Ericsson Nikola Tesla joint-stock
company Annual General Meetings
The regular Annual General Meeting of Ericsson Nikola Tesla
joint-stock company was held on June 26, 2025, at the company’s
headquarters in Zagreb. For participation in the work of the
Annual General Meeting 61.33 percent of the Company’s total
share capital was registered.
The Company’s President of the Management Board, Gordana

results in 2024, and additionally commented on Ericsson Nikola
Tesla Group’s strategy, business outlook and future trends.


achieved in 2024. Independent Auditors’ Report was presented

presented the Supervisory Board’s Report on the Performed
Supervision of the Company’s business operations in 2024.
In line with the published Agenda, Ericsson Nikola Tesla joint-
stock company Annual General Meeting adopted the following
Decisions:
• the Report of the Company’s Supervisory Board on the
Performed Supervision in 2024 was approved
• 
year 2024, amounting to EUR 22,469,997.40 will be allocated to
retained earnings. The Company’s shareholders will be paid
a regular dividend of EUR 10.54 per share from the retained
earnings from 2023 and the retained earnings from 2024. The


have the Company’s shares registered on their securities
account in the Central Depository & Clearing Company.
• Remuneration Report for Supervisory Board members and
Management Board in 2024, together with the Independent
limited assurance report on the Remuneration Report of
Ericsson Nikola Tesla d.d. is approved.
• Discharge from liability is given to the Company’s Management
Board, for the exercise of duties in 2024.
• Discharge from liability is given to the members of the
Company’s Supervisory Board and its Chairman in relation to
the exercise of their duties in 2024.
• decision was reached on the re-election of Ana Vrsaljko
Metelko, as a member of the Supervisory Board for the new 4

• it was decided that KPMG Croatia d.o.o. is appointed as the
auditor of business performance for the year 2025 and 2026.
The extraordinary Annual General Meeting of Ericsson Nikola
Tesla joint-stock company was held on November 14, 2025, at
the company’s headquarters in Zagreb. For participation in
the work of the Annual General Meeting, 61.04 percent of the
Company’s total share capital was registered and the following
decisions were adopted:
• the decision is reached to supplement the Company’s scope
of business activities, in a way that in addition to the existing
activities, the following activities are added:
• * production, design, installation, repair and maintenance of
solar equipment and devices and solar systems;
• *construction project management activity.”
• the decision was reached that the Articles of Association of
the Company of 13 May 1995, together with all its’ amendments
are replaced in their entirety by a new text, which was
attached to the Notice of the extraordinary Annual General
Meeting.
• the revised Remuneration Policy for the Management Board
and the revised Decision on the Remuneration of the Members
of the Supervisory Board was approved.
• the decision was reached on the election of Luca Orsini, Head of
Customer Unit North Europe, Market Area Europe, Middle East
& Africa in Ericsson, as a member of the Supervisory Board,

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Sustainability
report
ESRS 2 - General disclosures
Basis for preparation of report
BP-1 General basis for preparation of sustainability statements
BP-2 
Governance
Strategy
Material impacts, risks and oportunities
Environment
Key Performance Indicators in line with the EU Taxonomy
ESRS E1 Climate change
Social
ESRS S1 Own workforce
ESRS S4 Consumers and end-users
Governance
ESRS G1 Business conduct
Statement on the application of the Corporate Governance
26
27
27
27
28
30
44
57
71
72
77
84
85
99
102
103
109
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Managament
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Sustainability
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Financial
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ESRS 2 - General disclosuresIntroduction
Basis for preparation of report
This chapter provides key information on regulatory framework,
consolidation scope and approach of the ENT Group to value


that all relevant subsidiaries and companies are included in the
consolidated reporting. The chapter additionally describes the

level of uncertainty in estimations, sources of information disclosed
due to other regulations, and the application of the right to
gradually introduce certain requirements from ERSR standards in

The Sustainability Report of the Ericsson Nikola Tesla Group
for 2025 has been prepared in accordance with the European

year of applying this regulatory framework, thereby further
ensuring a structured and transparent presentation of
material environmental, social and governance impacts, risks
and opportunities, in line with the double materiality principle.

role, not solely as a regulatory requirement, but as a
foundation for long-term competitiveness, resilience and
value creation for stakeholders. As a technology company
contributing to the digital transformation of society, the Group

models and governance processes is becoming essential for
responsible and successful conduct of business in dynamic
market and societal conditions. Accordingly, the Sustainability
Report does not just provide an overview of existing practices,

of areas for improvement and guiding further steps in
integrating ESG matters into strategic decision-making and
operational governance.
BP-1 General basis for preparation of
sustainability reports
Introduction and regulatory framework
This Sustainability Report has been prepared in accordance with










Scope of consolidation and inclusion of subsidiaries and
branch oces
The Report has been prepared on a consolidated basis fully aligned
with the consolidation methodology applied in the consolidated




the report has been prepared in accordance with the applicable
regulatory requirements and that no legal entities have been

representativeness of the disclosed information.
The consolidated reporting scope for the purpose of sustainability

• Parent company: Ericsson Nikola Tesla d.d.
 
d.o.o. Ericsson Nikola Tesla BH d.o.o., Libratel d.o.o., Ericsson Nikola

Value chain
Within this Sustainability Report, the main value chains of the ENT
Group are considered, which at the same time represent the
Group’s key strategic business segments: the Telecommunications
Operators segment, the Digital Society segment, and the Research

and ICT services. In these segments, the ENT Group carries out

opportunities and actual or potential impacts on people, the
environment as well as its own business operations, taking into
account the entire value chain, including its direct and indirect
business relationships.
The policies of the ENT Group apply across all levels of the value
chain. In line with requirements of relevant ESRS standards,
information on indicators from the thematic areas ESRS S4 and
ESRS G1 includes data relating to both upstream and downstream
parts of the value chain, thereby ensuring the completeness
and compliance of the disclosed information with regulatory
requirements.
Use of exemptions from disclosure (intellectual property,
condential information)
In this Report the ENT Group has not used the possibility of omitting

experience or the results of innovation processes. Furthermore,
the Group has made use of the permitted disclosure exemption
regarding information on forthcoming events or matters under


1
Corporate sustainability Reporting Directive, CSRD
2

3
European Sustainability Reporting Standard, ESRS
4
Taxonomy Regulation
5
Delegated Regulation on Disclosures
6
Delegated Regulation on Climate
7
Delegated Regulation amending the Delegated Regulation on Climate
Table of contents
Management
report
Sustainability
report
Financial
statements
report
28
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
28
BP-2 Disclosures in relation to specic
circumstances
Periods
The ENT Group reports in accordance with the following time




Given the exceptionally rapid development of technologies and the
highly dynamic nature of technological change in the industry in
which the ENT Group operates, the Group does not, at this stage,


Sources of estimation and outcome uncertainty
ESRS E1
In 2025, material changes were made to the methodology for
calculating the GHG inventory compared with the previous reporting
period. The changes have been applied retroactively to the
comparative information for 2024 in order to ensure comparability
between the two reporting periods.
In addition to the aforementioned methodological changes, the
base year for tracking emissions was also changed. The base
year was changed from 2017 to the revised 2024. The reason is the
transition to GHG Protocol as the base methodology for calculating
GHG inventory, while the calculation for 2017 was carried out
using the Bilan Carbone tool as part of the LIFE Clim’Foot project,


these two frameworks, the year 2017 is not suitable as a base
year for monitoring trends in the new methodological context. The
revised year 2024 was selected as the new base year because it
encompasses a consistent application of GHG Protocol methodology,

and an expanded coverage of Scope 3, which constitutes a more
representative and methodologically comparable baseline value for
tracking future emission trends.
The rst change
previous methodology was based on fuel consumption data obtained


applied, multiplied by the kilometers traveled for all vehicles of all




light commercial vehicles. The transition to this methodology


private purposes, and the fuel payment model varies by individual
employee. Due to this, the data on fuel consumption were not

manner. Kilometers traveled for all vehicles are available at the

their application to the total annual kilometers traveled enables

regardless of the fuel payment method. The increase in the
reported emissions compared to the original data for 2024 is
solely the result of the expansion of scope to the entire vehicle

not an actual increase in fuel consumption.
Dierence in emissions for 2024:


The second change relates to Purchased goods and services


procurement items, mainly IT equipment and furniture, because
at the time of the initial reporting the methodology for a
comprehensive analysis of the total procurement has not yet
been established. From 2025, the calculation is based on the
comprehensive analysis of all the ENT Group’s procurement

relevant GHG Protocol Scope 3 categories. For category 3.1,
all operational procurement costs were included, including
professional and IT services, materials and equipment procured
for projects, logistics, software and other business services.
For category 3.2, capital goods were included, recorded in the
long-term assets registry of all the Group’s entities, including IT
equipment, network equipment, furniture and construction work.
The appropriate CEDA 2025 EEIO sector-average emission factor
was applied to each category of costs, and special attention was
dedicated to avoiding double calculation with emissions already
encompassed in other Scope 3 categories, such as energy,
transportation and business travel.
Dierence in emissions for 2024:
Category 3.1: originally 1,379 tCO
2
e, revised 23,087 tCO
2
e
Category 3.2: originally 2,147 tCO
2
e, revised 481 tCO
2
e
The third change relates to Upstream transportation and


For upstream transportation, the calculation is based on actual
data for all shipments in 2025. For each shipment, cargo weight,
distance and the mode of transportation were collected, which


the deliveries from suppliers to ENT, and ENT’s deliveries to
customers, for domestic and international destinations. This
approach replaced the previous methodology that was based on a
limited set of estimated data.
For employee commuting, data was collected by conducting a
survey among the ENT Group’s employees. The survey included
all the employees without an assigned company vehicle, with a
representative response. The results were weighted in order
to gain an estimation for the total population of the Group’s
employees without the company vehicle. For each employee,
data was collected related to the distance from place of
residence to the place of work, the frequency of coming to
work, and the means of transport used. The emissions were

all types of transport. This approach replaced the previous
methodology that was based on generic estimation instead of
actual employee data.
Increase in the emissions presented for both categories
compared to the original data for 2024 is the result of a more
comprehensive scope of data, and not the real increase in
activities.
Dierence in emissions for 2024: Category 3.4: originally 10
tCO, revised 169 tCO
Category 3.7: originally 426 tCO, revised 1,436 tCO
The fourth amendment
based approach for 2024. Updated emission factors aligned with
the methodology used for 2025 have been applied.
Dierence in emissions for 2024
, revised 134.48 tCO
Table of contents
Management
report
Sustainability
report
Financial
statements
report
29
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
29
Total eect of the change:

amounts to 27,768 tCO, compared with the originally reported
6,343 tCO
the expanded Scope 3 coverage, which is by its nature the
most comprehensive and complex category of GHG inventory,
because ti encompasses all the indirect emissions in the
value chain, including the emissions from suppliers, carriers
and employees. Scope 1 and 2 remain relatively stable when
comparing the original and revised inventory, while Scope
3 records an increase solely because of methodological
expansion of scope.


year 2024 covered only a smaller part of the total procurement,
while the revised calculation includes the overall procurement
of ENT Group by applying EEIO methodology. Given that the ENT

supply volume, supply chain emissions are structurally the
largest category of inventory. Similar approach applies to
category 3.4, where the original calculation was based on
limited estimation, and the revised one on actual data about all
the shipments.
An increase in the inventory shown is therefore not a


scope to categories that were previously not fully covered.
Uncertainty assessment
The uncertainty of the GHG inventory for the 2025 has been



The aggregated uncertainty of the total inventory amounts to

of approximately 14,419 to 33,274 tCO. The aforementioned 95%

which is a standard convention under the GHG Protocol
methodology, and not the measure of the uncertainty itself.
The high aggregated uncertainty is primarily attributable to

the use of EEIO methodology with aggregated sector factors,
inherently carries a higher uncertainty than categories based


Certain topics that are explored in this report include
disclosures relating to the future. Such disclosures have
no guarantee of future outcomes, and future activities and

The achievement of decarbonisation targets depends on
factors beyond the full control of the ENT Group, including the
evolution of the regulatory framework, the availability of green
energy, the decarbonisation of supply chains and technological
progress.
ESRS S1
In this reporting period, the methodology for calculating the
average number of training hours per employee and by sex
was enhanced in accordance with the disclosure requirements

presentation of training hours in relation to the recorded
training participants, the calculation now also includes the
average number of training hours in relation to the total
number of employees within each sex category. To ensure
comparability, the data for 2024 have been recalculated using
the same approach as applied in 2025.
Disclosures stemming from other legislation
In addition to regulations as set out in the Introduction and
within the relevant regulatory framework, ENT Group’s
Scope 1, 2 and 3 GHG emissions disclosures are based on the

measuring, reporting and managing greenhouse gas emissions
across all three scopes.
Use of phase-in provisions in accordance with Appendix C
of ESRS 1
ENT Group exercises the right to phase-in the certain
disclosure requirements from relevant topical ESRS standards,
as follows:
ESRS 2 – SBM-1: Strategy, business model and value chain:
The undertaking shall report the information prescribed by



a Commission Delegated Act to be adopted pursuant to Article

ESRS 2 – SBM-3: Material impacts, risks and opportunities and
their interaction with strategy and business model
ENT Group exercised its right to omit the information required



Group will, for practical reasons, only disclose qualitative
information regarding this requirement as it is unable to
present quantitative data.
ESRS E1 – E1-9: 
physical and transition risks and potential climate-related
opportunities
ENT Group exercises the right to omit the information


will, for practical reasons, only disclose qualitative information
regarding this requirement as it is unable to present
quantitative data.
ESRS S1 – S1-7: Characteristics of non-employees in the
undertaking’s own workforce
In accordance with the right set out in Commission Delegated



companies, and with respect to the amendment of Appendix C,
List of phased-in Disclosure Requirements, the ENT Group has
omitted the disclosure required under this provision.
ESRS S1 – S1-8: Collective bargaining coverage and social
dialogue
In accordance with the right set out in Commission Delegated



companies, and with respect to the amendment of Appendix C,
List of phased-in Disclosure Requirements, the ENT Group has
omitted the disclosure required under this provision.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
30
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
30





March 2026.
During the reporting period, changes also occurred in the
Supervisory Board of Ericsson Nikola Tesla d.d. The then-Chairman


the Extraordinary General Meeting of Ericsson Nikola Tesla, Luca
Orsini, Head of Customer Unit North Europe, Market Area Europe,
Middle East & Africa in Ericsson, was elected as a new member of
the Supervisory Board. The Supervisory Board elected Luca Orsini
as its Chairman.
The members of the Supervisory Board are appointed for a four-
year term, with the possibility of re-election. The Supervisory
Board currently has two independent members in accordance


Audit Committee consists of three members: one independent
member, Olgica Spevec; one dependent member of the
Supervisory Board, Carl Henrik Magnus Carle; and a third member,

Economics and Business, University of Zagreb, who serves as an
independent member who is not a member of the Supervisory
2 Governance
GOV-1 – The role of the administrative,
management and supervisory bodies
The composition and diversity of administrative,
management and supervisory bodies
In accordance with the Articles of Association of Ericsson
Nikola Tesla d.d., the Management Board may consist of one to

Company held on 14 November 2025, amendments to the Articles
of Association were adopted, including the decision that the
Supervisory Board may have up to nine members. During the 2025
reporting period, changes occurred in the composition of both
the Management Board and the Supervisory Board of Ericsson
Nikola Tesla d.d.
At the beginning of 2025, the Management Board consisted of a

Management Board was expanded with three additional members:
 
was appointed member of the Management Board for a term of 4
years;
 
Management, was appointed member of the Management Board
for a term of 4 years;
 
Development, was appointed member of the Management Board
for a term of 4 years.

President of the Management Board. Following the expansion
of the Management Board, the Supervisory Board adopted the
Rules of Procedure of the Management Board, which set out
the division of responsibilities between the President and the
members of the Management Board.

resignation from the position of President of the Management




At the end of the year, additional changes occurred in the
composition of the Management Board: on 17 December 2025, the
Body
Total
number
of
members
Number
of
women
Number of
men
Percentage
of men
Percentage
of women
Percentage
of
independent
members of
the board
Supervisory
Board
5 2 3 60% 40% 40%
Management
Board
4 0 4 100 % 0 % N/A
8
Executive
management
16 3 13 81% 19% N/A
9
The above information refers to the situation as at 31 December 2025.
8

dual board.
9

dual board.
Diversity of the highest supervisory and management bodies
Table of contents
Management
report
Sustainability
report
Financial
statements
report
31
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
31

accounting, as well as competencies relevant for the ICT sector.
In April 2025, the Supervisory Board established two additional
sub-committees: Appointment Committee and Remuneration
Committee. The committees consist of four members, two of
whom are independent members of the Supervisory Board,
one is a dependent member of the Supervisory Board, and the
fourth member comes from the Ericsson Corporation, serving as
Director for Mergers and Acquisitions.
The roles and responsibilities of the governance bodies
The role of the Management Board and the Supervisory Board is

of Association and the Corporate Governance Principles, and
internal rules.
Role of the Management Board
• Adopts and implements the Company’s strategy and
business plans.
• Takes special care of relations with shareholders and their
interests.
 
business results, as well as other important business issues.
• Adopts acts and standard business procedures and

 
recalls the members of the Executive Management, and
determines the principles of their remuneration.
• Supervises the work of Executive Management and ensures
succession and development plan.
 
strategic plans.
• Monitors and manages impacts, risks and opportunities,
of which it regularly informs the Supervisory Board. Includes

environmental and social impacts, as well as sustainability risks
and opportunities.
Role of the Supervisory Board
• The main responsibility of the Supervisory Board is to
supervise the management of the Company’s business.
• Regularly receives the reports from the Management Board
about key business aspects.
• Informs shareholders about its role in supervising and
ensuring compliance with the law.
 
allocation and proposes the appointment of auditors.
• The Supervisory Board may convene the Company’s Annual
General Meeting and must do convene it when this is necessary for
the good of the Company.
• In its work, it applies ethical standards and takes care of the
Company’s and shareholders’ interests.
Role of the Audit Committee
 
internal controls and security aspects.
• Most Committee members are independent, including the
Chairperson.
• The Committee regularly cooperates with the Director of
Finance and other relevant functions responsible for internal
controls as well as risks, compliance and security management.
The role of the Appointment Committee
• It oversees the nomination process for the Supervisory
Board and the Management Board.
• It prepares a succession plan for members of the
Supervisory Board and the Management Board, in cooperation with
the Chairs of those bodies.
• It proposes and monitors measures aimed at achieving the
targeted share of women in both bodies.
• It performs other tasks within its remit in accordance
with the Code of Corporate Governance, as instructed by the
Supervisory Board.
The role of the Remuneration Committee
• It recommends remuneration policies for the Management
Board and the decision on remuneration for the Supervisory Board.
• It oversees the structure and level of remuneration for
senior management and employees and provides recommendations
to the Management Board.
• It supervises the preparation of the annual remuneration
report for approval by the Supervisory Board.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
32
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
32
Identity of the members of the Supervisory Board and the Audit Committee
Stefan Kötz

the Supervisory Board,
member of the Appointment
Committee and the
Remuneration Committee until

He was Head of Mission
Critical Networks & Head
of Strategic Projects in
Ericsson’s Market Area
Europe and Latin America


the role of acting Head of
Market Area Europe and Latin
America. Before that, he was
the Head of Customer Unit
Western Europe, responsible
for business in Germany,

in Liechtenstein. He graduated
in Telecommunications from
the University Kaiserlautern.
He is a member of the
advisory board of NRW.
Investment Bank and the
Management Board of

Luca Orsini

Supervisory Board, member of
the Appointment Committee
and the Remuneration
Committee since 14 November

Luca Orsini serves as the Head
of Customer Unit North Europe,
Market Area Europe, Middle
East & Africa in Ericsson. In
this role, he is responsible for

across the markets of
Germany, the United Kingdom,

Republic, Denmark, Finland,
Norway, Slovakia, Ireland,
Lithuania, Latvia, Estonia,
Iceland, Greenland and the
Faroe Islands. In addition to this
position, he is a member of the
Management Board of Ericsson

than 20 years of international
experience within the Ericsson
Corporation, gained through
assignments in Asia, Europe
and Latin America, and holds a
Master’s degree in Electrical

University in Rome.
Olgica Spevec

2019, re-elected on 14 June
2023, Deputy Chair of the
Supervisory Board, and the
Chair of the Audit Committee
since 17 December 2020,
member of the Appointment
Committee and Remuneration

Director of Amplus Consult
Ltd, Zagreb. From 2014 to
2022 she was a business
consultant and Director of
Amplus Consult Ltd. Before
that, she was the President of
the Competition Council in the
Croatian Competition Agency

Minister of the Economy

University of Zagreb Faculty
of Economics, Croatia.
Ana Vrsaljko
Metelko

Supervisory Board, elected
on 29 June 2021, re-elected
on 26 June 2025; Chair of the
Appointment Committee and

Attorney and founder of

Metelko, Zagreb. As of March
2021 in cooperation with
Ostermann and Partners LLP


previously a lawyer in the

In-house Lawyer at Tankerska

Graduated at Law School,
University of Zagreb.
Petar Šimundža

Board and employees’
representative in the SB since

System Software Engineer
at Ericsson Nikola
Tesla d.d. Graduated in
Electrical Engineering,
Telecommunications, Faculty
of Electrical Engineering,
Mechanical Engineering and
Naval Architecture, University
of Split. In Ericsson Nikola
Tesla since 1997. Before that,
he worked at the Ministry




Homeland War, member of
the Croatian Armed Forces,
Air Surveillance and Guidance
Brigade.
Carl Henrik
Magnus Carle

Board since 14 June 2023,
appointed as the member of
the Audit Committee on 29

Ericsson Head of Finance &
Business Management for IPR
& Licensing. Graduated from
Uppsala University in Sweden
and holds a Master of Science
degree in Business Studies
and Economics.

Supervisory Board: Olgica Spevec, Chair of the Audit Committee, Carl Henrik Magnus Carle, member of the Committee, while

Business, University of Zagreb. The Appointment Committee and the Remuneration Committee have four members; three
members from the Supervisory Board: Ana Vrsaljko Metelko, Chair of the Committee, members Luca Orsini and Olgica Spevec, while the

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Management Board and Executive Management
As at 31 December 2025, the Management Board and Executive Management consisted of the following members:
Siniša Krajnović, President of the
Management Board
Damir Bušić, member of the Management
Board
Hrvoje Benčić, member of the
Management Board
Milan Živković, member of the
Management Board
Siniša Krajnović, President of the Management Board
Damir Bušić, member of the Management Board and Director of Finance
Hrvoje Benčić, member of the Management Board and Director of Customer Solutions and Services
Milan Živković, member of the Management Board and Director of Strategy, Business Development and Relations with
State Institutions and Industry
Andrej Grgurić, Director of Research
Antonija Lončar, Director of Marketing, Communications and CSR
Branka Vučemilo Elezović, 
Branko Dronjić, Director of IT and Test Environment Operations
Drago Holub, Director of the Research and Development Center
Goran Ožbolt, Director of General Services
Ivan Barać, Director of Sales and Marketing for Hrvatski Telekom and Crnogorski Telekom
Jagoda Barać, Director of Sales and Marketing on Export Markets for the Operator Segment
Miroslav Kantolić, Director of Sales and Marketing for A1 Hrvatska, Telemach HR and alternative operators
Tihomir Fabeta, Director of ICT for Digital Society
Vjeran Buća, Director of Sales and Marketing for Digital Society
Željko Antolić, Director of People and Culture
Members of the Executive Management of the Company:Management
Board:
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The expertise and skills on sustainability matters
The Company’s Management Board and Supervisory Board gather


industry, business strategies and key market challenges. Such a
combination of knowledge and experience enables informed and

Company’s operations.
The status of ESG reporting was presented at the meeting of the
Audit Committee on 25 March 2025. The Sustainability Report for

at the meeting of the Audit Committee held on 24 April 2025, while its
status was presented again at the meeting of the Audit Committee
on 16 December 2025. The Sustainability and Corporate Responsibility
KPI target was presented and adopted at the meeting of the
Supervisory Board on 27 March 2025, and the Supervisory Board
formally adopted the Sustainability Report for 2024 on 25 April 2025.
The Company’s Management Board relies on Executive Management
that consists of, in addition to the President and members of the

with relevant domain knowledge and experience in ICT industry.
The Company’s business performance in the region is additionally

Kosovo, whereby the management relies on the competencies
of local employees, thus ensuring a better understanding of

framework.
To ensure professional support, transparency in decision-making

committees have been established and operate within the ENT
Group, including:
• Security, Risks and Compliance Board,
• Investment Board,
• Innovation Steering Committee,
• Change Management and Digital Transformation Board.
In line with the regulatory requirements of the European Union,
national legislation and the Group’s targets in implementation of
sustainability and reporting, there are:
• The Steering Committee for ENT Group Sustainability,
• The Implementation Committee for Sustainability that aims to
coordinate ESG activities and reporting.
The work of these committees ensures a systematic approach to
sustainability, monitoring regulatory changes and integration of ESG
factors in the Company’s strategic governance.
The Implementation Committee for Sustainability gathers the

areas key to sustainability reporting, including management, human
resources, strategy, environmental protection, and occupational
health and safety.
To ensure systematic and high-quality monitoring of sustainability
reporting and related activities, a monthly report on ESG activities
has been regularly prepared for the Management Board since
January 2025. Sustainability matters are included as a standing topic
at the meetings of the Executive Management. This approach enables
a clear overview of key activities, completed training sessions and
initiatives, as well as continuous monitoring of progress towards
established targets, with the aim of timely identifying potential
obstacles and implementing appropriate mitigating measures.
Furthermore, in order to streamline and enhance the reporting
process, the ENTG ESG SharePoint platform was introduced in the
fourth quarter of 2025 as the central cooperation point for all
stakeholders involved in the sustainability reporting process.
The ENT Group regularly participates in external assessments of
ESG practices by completing relevant sustainability questionnaires.
During 2025, the following questionnaires were completed:
 


 
Croatian Business Council for Sustainable Development, with a very
high rating achieved.
Pursuant to new reporting requirements, during 2025 the members
of the Implementing Committee attended professional and

 


 
• UNICEF webinars dedicated to children’s rights,
• Cooperation with external sustainability consultants.
In December 2025, the planning process for the continuation and
expansion of training activities for 2026 commenced, with the
objective of further deepening expertise and strengthening

sustainability management.
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Corporate governance and due diligence
Policies MDR-P – Policies adopted to manage material
sustainability matters
Overview of policies
Ericsson Nikola Tesla Group consistently implements the principles

international norms and standards. The application of the OECD
Guidelines for Multinational Enterprises, the UN Guiding Principles on


regulatory compliance.
ENT Group is focused on respecting human rights and employee
rights, protecting competition, preserving the environment

information security and business continuity management systems

protection of the interest of all stakeholders.
Code of Corporate Governance

the Republic of Croatia and recommendations from OECD Principles
of Corporate Governance. When updating the document, the
undertaking has aligned to the greatest extent possible with the
recommendations of the national Corporate Governance Code,
adopted by the Croatian Financial Services Supervisory Agency

since 1 January 2021. An amended version of the Code was adopted
at the end of 2024.
The national Code is aligned with the G20 Principles and the


obligation of the Supervisory Board and the Management Board
to follow the recommendations of responsible business conduct.

Multinational Enterprises and in the relevant OECD Due Diligence
Guidance for Responsible Business Conduct. The ENT Group
continues to undertake the necessary measures to ensure their
consistent application within its business operations. Furthermore,
it applies the OECD Guidance for Responsible Business, including
in-depth analysis of sustainability risks and integration of
sustainability into business strategy.
Code of Business Ethics

companies comprising the Ericsson Nikola Tesla Group and sets
out clear rules for responsible business, including commitment
to human rights, anti-corruption and environmental protection.
ENT Group applies the UN Global Compact principles and reference
international documents such as the Universal Declaration of
Human Rights, the ILO Declaration of Fundamental Principles and
Rights at Work, the Rio Declaration on Environment and Development
and the UN Convention against Corruption. Respect for human
rights concerns all aspects of business while ensuring fair and
safe working conditions. Through the application of the UN Guiding
Principles on Business and Human Rights, ENT Group avoids and/or
mitigates actual and potential negative impacts on human rights,
ensures fair and safe working conditions, freedom of association,
collective bargaining and non-discrimination, respects privacy
and freedom of expression, including the protection of personal



Code of Conduct for Business Partners
ENT Group requires business partners, including suppliers, to
adhere to high standards of ethical business practices, including
the protection of human rights, fair and safe working conditions,
and environmental standards. The Code is based on internationally

Nations Global Compact, the UN Guiding Principles on Business and
Human Rights, the OECD Guidelines for Multinational Enterprises and


due diligence processes in accordance with the OECD Due Diligence


procurement of raw materials, including but not limited to tin,
tantalum, tungsten and gold, which are used in products supplied to
the ENT Group, its customers or business partners.



transactions. Business partners must adhere to the same
principles of anti-corruption, promote integrity, transparency and
ethical business practices, and ensure compliance with all relevant
laws and regulations.
Additional requirements for business partners
Environmental protection requirements
In the document Business Partner Environmental Requirements,

environmental protection that are mandatory for all business
partners delivering hardware components and products,

and network development activities, as well as those with high
environmental risks. The requirements focus on products and
services, production, transportation, energy consumption, water
and waste management, and a circular approach. Business partners
must reduce the negative impact of their products and processes

are prescribed regarding the use of materials, environmental

Occupational health and safety requirements



installation services and all other suppliers who perform high-risk
jobs. Business partners must ensure systematic management of
occupational health and safety, including appointing responsible
persons, conducting risk assessments, and complying with legal

appropriate protective equipment.
It is mandatory to report incidents, especially serious accidents,
within 24 hours, and cooperate in investigating the cause. For high-
risk projects, partners must develop safety plans and actively
manage risks. Subcontractors must comply with the same safety

Ericsson Nikola Tesla Group requires constant monitoring and
improvement of safety practices in order to ensure high standards
of occupational health and safety.
Rulebook on the Independent Internal Audit function
The purpose, mission, role, authorities, responsibilities and all other
requirements related to the Independent Internal Audit function
in the ENT Group are described in detail in the Rulebook on the
Independent Internal Audit function in the ENT Group. The Rulebook
refers to the Code of Business Ethics and the Code of Ethics of
Internal Auditors, which are based on OECD, UN and ILO guidelines.
Compliance and protection mechanisms
ENT Group’s corporate policies and business practices are aligned
with international standards, with special emphasis on security,
privacy and product safety.
The Group has adopted an Integrated Management System Policy
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which connects all the systems and processes and enables it to

Management System Policy is applied throughout the entire
Ericsson Nikola Tesla Group and covers all of its core activities,
whereby each employee is familiar with this Policy and accepts it as
a guiding principle in their work.
Through this Policy and its implementation, the Group commits
to the continuous improvement of its integrated management
system, including the management of the following systems:






and employee safety as well as the well-being of the wider social
community.
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Comprehensive overview of compliance and protection
Scope Method of application
Transparency
and information
disclosure
Data management according to ISO 27001 ensures information protection, compliance with data protection regulations, and availability to relevant stakeholders
-
nance, ensuring the availability and clarity of data.
Financial
compliance and
taxation
Financial operations must be fully compliant with local laws and regulations, including the preparation and timely submission of statutory reports to competent
-

transactions must be in accordance with the Group’s approval policy and Code of Conduct for Business Partners, with strict adherence to ethical standards and
-
ness Partners, as well as with regulations related to environmental protection and occupational health and safety.
Data and product
safety
The application of ISO 27001 ensures comprehensive cyber security measures, data protection and safe product development in accordance with international
guidelines on responsible corporate behavior. ENT Group ensures that solutions, products and data are protected, managed and processed in a safe manner, in
accordance with the GDPR regulation.
Privacy protection
and digital security

of individuals. ENT Group is committed to protecting personal data which include personal information relating to everyone who works for the ENT Group, custom-
ers and their end users.
Human and work-
related rights
Various channels for reporting irregularities related to human and work-related rights are available at ENT Group. Employees can submit a report to the Commit-
tee for Receiving and Resolving Complaints, which acts in line with the Labor Act and internal rulebooks, by using incident reporting boxes at locations in Zagreb,
Split and Osijek. Also, the Voice of ENT Group survey regularly provides employees with the opportunity to express their opinion about the company’s work envi-
ronment and business practices.
External stakeholders can also submit reports of suspected human rights violations via the Compliance Line.
A Sensitive Business Framework has been established in the ENT Group in the area of human rights protection, ensuring the assessment and management of busi-
ness activities that may entail elevated risks.
Protection of
business partners
ENT Group’s business partners and their employees may report suspected violations of applicable laws or the Code of Conduct for Business Partners by using

reports received in good faith are considered in accordance with applicable legislation. Information about available reporting channels is available at ENT Group’s

Environmental
sustainability
ENT Group implements environmental protection measures and continuously improves the management system in these areas through an integrated manage-
ment system which includes both ISO 14001 and other internal policies. Management extends to the upstream value chain through the application of environmental
requirements criteria for suppliers, including the implementation of audits, if necessary.
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GOV-2 – Information provided to and
sustainability matters addressed by the
undertaking’s administrative, management
and supervisory bodies
The highest governance bodies are regularly informed about
sustainability matters through structured reports, meetings and
strategic workshops. During the reporting period, these bodies
have considered key impacts, risks and opportunities related to
sustainability, and have reached relevant decisions.
Informing the bodies and the frequency of reporting in 2025, including
the relevant committees:
• The Supervisory Board held a total of 8 meetings, including 4
regular, 3 extraordinary and one strategic workshop. The topics
of the meetings included the business environment, activities

results, employee-related matters, the status of principal risks

controls and compliance. Additional topics concerned changes in
the governance structure, shareholder relations, share price
changes and other relevant areas.
• The Management Board informs the Supervisory Board monthly
via ENT Monthly Business Report, which includes an overview of

programs. Activities and the achievement of targets related to
the attraction, development and retention of employees were
monitored.
• In 2025, a total of 30 meetings of the Management Board were held,

examined in detail, including an analysis of performance against

to 2028 and resource requirements for the forthcoming period
were considered, together with an assessment of existing and
potential risks and proposals for mitigating measures.
• The Executive Management held 13 meetings, including a strategic

primary risks and key focus areas, compliance-related matters,

were discussed.
• The Audit Committee held four regular and two extraordinary


and the sustainability report, as well as principal risks. It
also addressed matters related to quality control and risk
management, IT security and compliance, as well as corporate
sustainability reporting. It decided about the reported potential
violations of compliance and supervised and evaluated ethics

internal control systems and provided recommendations to the
Supervisory Board and the Management Board.
• Security, Risks and Compliance Board held 6 meetings, where they
discussed the aspects of security, data protection, independent
internal audit and compliance. In 2025, the ENT Security, Risks and
Compliance Board met 4 times at regular quarterly meetings,
where the following topics were discussed: compliance, security,
personal data protection, activities of the independent internal

and occupational health and safety. Additional meetings of the
members of the ENT Security, Risks and Compliance Board were
held in their capacity as the Business Partner Review Board.
Such meetings, convened as needed for the purpose of managing
relationships with business partners, were held 4 times through
written communication among Board members.
• The Remuneration Committee and the Appointment Committee
held a total of 12 meetings in 2025, of which 8 were held by the
Remuneration Committee and 4 by the Appointment Committee.
At their meetings, the Committees addressed matters within

of nominating members of the Management Board to ensure
fairness and transparency, monitoring progress towards
achieving the target share of women on the ENT Management
Board and Supervisory Board, proposing terms of nomination
for potential new Management Board members, and overseeing
the Management Board’s policy for selecting and appointing

recommendations to the Supervisory Board regarding the
remuneration policy for the President and members of the
Management Board, monitoring the amount and structure
of remuneration for senior management and employees as a

responsibilities within their scope.
• The General Meeting of Shareholders decided on the allocation

decision on remuneration for members of the Supervisory
Board, the remuneration reports for members of the
Management Board and the Supervisory Board for 2024, the
granting of discharge to the Management Board and the
Supervisory Board, the election of members of the Supervisory
Board, the appointment of the independent auditor of the annual


a regular Annual General Meeting in June and an extraordinary
Annual General Meeting in November.
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Sustainability
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GOV-3– Integration of sustainability-
related performance in incentive
schemes
Remuneration of the Supervisory Board
Members of the Supervisory Board are entitled to receive a
monthly remuneration for their work on the Supervisory Board
from the date of their appointment to that position until the date
on which their mandate ceases. The members of the Supervisory
Board proposed by the largest single shareholder, LM Ericsson, who
are elected at the General Meeting of Shareholders, waive the right
to receive the monthly remuneration for work in the Supervisory
Board, in line with the policies of their employer. Each member of the
Supervisory Board is entitled to receive a monthly remuneration
amounting to half of the average monthly gross salary paid in
the Company in the month for which the remuneration is paid. A
member of the Supervisory Board who simultaneously serves on
any of the committees receives an additional monthly amount, as

To preserve their independence and full objectivity, the
remuneration of Supervisory Board members are independent
of the Company’s results and do not include a variable part of
compensation. Members of the Supervisory Board are entitled
to reimbursement of appropriate expenses incurred in the
performance of their duties.
Remuneration of the Management Board
The remuneration and reward for the work performed by the
Management Board are based on sustainable development
and growth of the Company and are carried out in line with the
Remuneration Policy for the members of the Management Board
adopted by the Supervisory Board.
Remuneration elements for the Management Board
Annual target remuneration
The annual target remuneration includes the contractual payment

awarded for achieving annual business objectives at the target
level. The share of the STI component in the annual target
remuneration for Management Board members is determined by



is reviewed once a year and, if necessary, increased, provided that
the budget includes and secures the funds for that purpose.



involved, taking into account companies in the labor market,

monthly contractual salary is agreed in individual employment
contracts and/or managerial contracts.
Short-Term Incentive Plan (STI)

in accordance with the strategic guidelines for the future
development of operations and the Company’s business objectives,
as approved by the Supervisory Board for a given year. The
Short-Term Incentive Plan is used to reward the achievement of the


The level of target achievement for short-term incentives within
the annual target remuneration of Management Board members
is determined by the Supervisory Board. The level of target
achievement for Management Board members related to the
Company-wide employee reward is determined by the Supervisory
Board and forms part of the individual contract. Remuneration
earned by the Management Board on this basis is included in the
variable component of remuneration.
The Short-Term Incentive Plan targets for Management Board

targets related to sustainability and responsible business conduct.
Financial targets accounted for 90% of the target achievement,

and responsible business conduct targets comprising the following
key indicators: responsible sourcing, compliance, gender equality
and inclusion, sustainable development goals, and climate change
mitigation.
The Supervisory Board approves the annual goals of the Company
and of the Management Board based on the adopted Business Plan.

performance is assessed as the basis for calculation.
The total remuneration of Management Board members consists


members of the Management Board.
Additionally, pursuant to a decision of the Supervisory Board,
Management Board members are entitled to participate in the
Long-Term Incentive Plan, under which they may acquire shares up
to a maximum amount of 40% of the annual contractual salary, based
on the share value at the time of allocation. In addition to the basic
remuneration, the Management Board has the right to additional

supplementary health insurance, trainings, etc.
Remuneration Report for the 2025 business year
In accordance with the Companies Act, the Supervisory Board and
the Management Board of Ericsson Nikola Tesla d.d. submit to the
General Meeting the Remuneration Report regarding remuneration
paid to the members of the Supervisory Board and the Management
Board during the 2025 business year.
The Remuneration Report will form part of the notice convening
the General Meeting to be held on 10 June 2026 and will be
available on the Company’s website for ten years from the date
of publication.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
40
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
40
GOV-4 – Statement on due diligence
Core elements of due diligence Paragraphs in the Sustainability Statement
Embedding due diligence in
governance, strategy
and business model
 
 
 
 
Engaging with aected stakeholders
in all key steps of the due diligence
 
Comprehensive overview of compliance and protection mechanisms
 
 
 
Identifying and assessing adverse
impacts
 
 
 
 
 
 
 
Taking measures to eliminate
negative eects
 
 

 
 

 
Tracking the eectiveness of these
eorts and communicating
 
 
Table of contents
Management
report
Sustainability
report
Financial
statements
report
41
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
41
GOV-5 – Risk management and internal
controls over sustainability reporting
Integrated risk management
Ericsson Nikola Tesla Group applies an integrated Enterprise

international standards, including ISO 31000:2018 and the COSO


Corporate Governance.


the achievement of strategic and operational objectives.

technological, security, reputational, social, and
environmental risks, including risks related to climate change,
cybersecurity, and value chain management.
The risk management methodology is based on clearly

quantitative assessment methods. Risk assessment includes

and the interdependencies of individual risks, as well as

appetite. The risk management process relies on a broad
range of internal and external information sources, including


and industry practices. This ensures that expert insights
and relevant perspectives are incorporated into the risk
assessment.
The assessment results are documented and compared

comparability, and reliability of assessments across


resources to areas with the greatest potential impact on
the achievement of strategic objectives. This contributes
to the resilience of the business model and the continuity of
operations in a changing regulatory and market environment.
Although the system primarily focuses on identifying and

certain risks may also be viewed as potential opportunities.

ERM system, ensuring their integration into the broader
corporate governance framework.

units, processes, and projects, where responsible persons
identify and assess risks within their respective areas of
activity and propose and implement mitigation measures.
Risks that arise across multiple functions, such as
procurement, sales, payments, security and quality, are
coordinated with the support of the competent bodies within

objectives. Regular risk monitoring is implemented through
a reporting and assessment system which is included in
management processes at the Executive Management level.
Internal Audit
The internal audit function operates independently from
operational functions and provides objective and independent

governance system, risk management and internal controls.
The work of internal audit is focused on adding value and
improving operations through a systematic and disciplined
assessment of key processes.
At the beginning of 2025, the internal audit strategy was

Audit Standards. The aim of the strategy is to improve the
monitoring system, increase transparency, and further
strengthen compliance with international practices in the

Sensitive Business Framework
At the beginning of 2025, the ENT Group established a
Sensitive Business Framework in the area of human rights
protection with the aim of systematically managing ethical,
legal, and reputational risks that may arise from certain
business opportunities.
The framework was developed by relying on international
standards and guidelines, including the UN Guiding Principles
on Business and Human Rights, the ILO Declaration on
Fundamental Principles and Rights at Work and the OECD
Guidelines for Multinational Enterprises. It is aligned with
the regulatory requirements of the European Union,
including the requirements of the Corporate Sustainability


management of adverse impacts in the value chain.
The key screening criteria for determining compliance with
human-rights-related risks and for approving a business
opportunity in sales include the following:
 
 

• Technology risk, whereby products, solutions and


is made regarding the further course of the business
opportunity, taking into account brand exposure risk, human

may be: approval without conditions, approval subject

measures, or rejection of the business opportunity.
In 2025, 32 approval procedures for business opportunities


conditions.
Strategic approach to risk management
Risk management in ENT Group is based on a proactive
approach that includes:
• identifying key risks 
regulatory, operational, security, reputational, social and
environmental context,
• strategic decision-making based on the analysis of
sensitive business areas,
• intertwinement of risk management and business
objectives, where sustainability and compliance are
integrated into decision-making processes.
Responsibilities and roles of key management bodies
The Management Board and the Supervisory Board actively
participate in overseeing business risks and making decisions
that ensure the application of due diligence. The ENT Group
Security, Risks and Compliance Board plays a key role in
assessing and monitoring sensitive business activities as well

compliance.
Role of the Management Board
The Management Board of ENT Group is responsible for
determining the strategy and business plan, and ensuring
their implementation, whereby risk management is an integral
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Table of contents
Managament
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Sustainability
report
Financial
statements
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42

 

• identifying, assessing and monitoring risks that may

• oversight of the operations of the Executive
Management and assessment of potential risks associated
with operational activities.
• submission of business reports to the Supervisory
Board, including assessment of deviations from planned goals
and analysis of their causes.
 

position or reputation of the Company.
• reporting on all observed irregularities and proposing
appropriate measures to resolve them.
Role of the Supervisory Board
The Supervisory Board supervises the work of the
Management Board, whereby risk management is a key area
of responsibility. Their key responsibilities include:
• supervision of the Company’s business operations
with the aim of ensuring compliance with the Company’s
regulations and acts,
• control over transactions with related parties to

thereby reducing the risk of abuse of power and unfair
business practices,
 
statements, including risk assessment related to operations

risks,
 

independent expert before each transaction, which reduces

• ensuring the application of procedures for approving
and publishing transactions, in order to ensure compliance

Role of the Security, Risks and Compliance Board
ENT Group’s Security, Risks and Compliance Board oversees
and manages key aspects of risk and regulatory compliance

rules and procedures are implemented in accordance with
regulatory requirements, internal policies and international
standards. The Board cooperates with the Management
Board, Executive Management and line managers of all

consistent application of corporate acts.
As part of its activities, the Security, Risks and Compliance
Board oversees the following key areas:
 
regulations, the Code of Business Ethics, and laws on
employment and the protection of workers’ dignity, with
regular assessment of risks related to work relations,
equality, and immigration regulations.
 
tax reports, compliance with accounting standards, approval

of suppliers through continuous due diligence.
 
with internal sales guidelines and regulatory requirements,
particularly in sensitive business areas such as government

management.
 
regulatory and contractual obligations, implementing
measures to prevent bribery and corruption, ensuring
compliance with competition laws, and protecting intellectual
property and personal data.
 
standards, such as ISO 27001, ISO 9001, ISO 14001 and ISO 45001,
monitoring contractual obligations and legal requirements,
managing risks related to health, occupational health

framework for business continuity.
• Marketing, Communications and Corporate Social

management of reputational risks and compliance with
regulations related to relations with investors, corporate
communications and marketing.
In addition to the above activities, the Business Partner
Review Board assesses the compliance of business
relationships based on data collected through due diligence
procedures conducted in Sourcing and Finance. The Board
makes recommendations to the Management Board and
Executive Management regarding the approval or rejection of
cooperation with business partners or business models that
pose unacceptable compliance risks. For each of the above


and proposes measures to mitigate risks, ensure regulatory
compliance and make informed decisions.
Management of prime company risks

of each business year. Based on information from Executive
Management, the Management Board proposes an initial
list of risks which is then considered by the Supervisory
Board. The Supervisory Board may adjust the list of risks by
shortening or expanding it. In the event that new potential


timely response. Depending on the type of risk, a crisis team
responsible for rapid action to mitigate or reduce negative



groups:
 strategic,
 business,
 operational,
 
 security,
 regulatory,
 environmental, including physical and transition risks related
to climate change
 social
 reputational.

which are then continuously monitored and for which

risks and reduce or avoid their negative consequences.
Certain risks are integrated into strategic programs at the
company level, ensuring their systematic management.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
43
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
43
Risk status can be one of the following:
 o track
corrective action,
 concern
monitoring,
 on target
additional interventions.
These statuses are also presented at the meetings of the

track” are subject to detailed analysis and discussion, and
based on the reports presented, the Audit Committee and
Supervisory Board issue guidelines and approve further
steps and action measures. Meetings of the Audit Committee
and Supervisory Board are held quarterly, and more often if
necessary.
Role of Executive Management
In addition to participating in the initial preparation of the
risk list proposal, Executive Management regularly monitors
the status of key risks and implemented activities through
monthly meetings. Based on insights and trends, possible
improvements are suggested to upgrade risk management
and ensure the company’s long-term resilience.
Sustainability risks for 2025

risks for 2025:
1. ESG-related regulatory requirements
Given that the European Union continuously updates and
expands ESG legislation, including the ESRS standards, there is
a risk of non-compliance with new regulatory requirements,

risk, the company continuously monitors regulatory changes,

data collection, and cooperates with external experts to
ensure timely and reliable compliance.
2. Data privacy and security

digitally connected world. To reduce exposure to threats,
regular cybersecurity assessments are conducted and
strict data protection measures are implemented. This risk
is especially important in view of the increasing dependence
of business on digital technologies, the EU’s 5G Security
Toolbox, the requirements of the EU’s most extensive
directive on cybersecurity so far, the NIS2 Directive, and the
requirements of the Cyber Resilience Act which improves
the cybersecurity standards of products that contain
a digital component, requiring manufacturers to ensure
cybersecurity throughout the life cycle of their products.
3. Workforce availability and employee turnover
Maintaining stability in terms of number and competence
of employees and reducing turnover of key talents are the
main priorities. This risk is highlighted in the context of

changes in the labor market. ENT Group takes steps to ensure
competitive working conditions, invest in employee training
and develop programs that encourage their motivation.
4. Cybersecurity as a management risk

the framework of company risk management. Given the
increasing number of threats in the digital space, proactive
approaches have been implemented to manage cyber
security-related risks. This includes investing in technological
systems to detect and prevent attacks, as well as educating
employees on security practices.
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Sustainability
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Financial
statements
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Table of contents
Managament
report
Sustainability
report
Financial
statements
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44
3 Strategy
SBM-1 – Strategy, business model and value
chain
Ericsson Nikola Tesla Group is a provider of communication
products and innovative solutions and services in the
information and communication technology industry. It is the
leading Croatian exporter in the software export segment.
The Group bases its operations on technological leadership, the
high quality of ICT products and solutions, a broad technological
portfolio, and a strong presence in the local and regional
markets, as well as on the technical expertise of its employees.

infrastructure, innovative ICT solutions, and platforms for
digital transformation. Ericsson Nikola Tesla’s vision is a world
where ICT solutions transform society, securing sustainable
future and value for all the stakeholders.
The fundamental values are excellence, integrity and
perseverance, and all business activities are carried out in
accordance with them.
The aim is to ensure continuous improvement of solutions,
responsible business operations and achievement of strategic
goals while adapting to the dynamic market and regulatory
environment.
Business model
Ericsson Nikola Tesla Group’s business model is based on
creating value for key stakeholders:
 for customers through solutions and products which enable
new sources of revenue, improve user experience and

 for employees by encouraging talent development, enabling
professional advancement and ensuring work-life balance,
 for shareholders through sustainable growth of company
value,
 for society through responsible business and development


The Group operates in an extremely dynamic environment

but business models, and continuous monitoring of market,
technological and social changes.
Strategic business segments
The business strategy encompasses three key segments, each

1. Telecom
 delivery of ICT products, solutions and services from
Ericsson, Ericsson Nikola Tesla and other selected suppliers
to telecommunications operators,
 technical and advisory services, as well as testing services
for operator networks on a local and global level,
 creation and implementation of complete solutions for radio,
transmission and core networks,
 implementation and integration of advanced cloud-based

network performance and advanced network services that

consumption and reduced environmental footprint,
 support systems, as well as other solutions such as media
and private network solutions, which also includes network
planning and design services,
 development of programmable, automated cloud-based
networks,
 strategic goals include preserving and increasing market
share, demonstrating technological leadership, accelerating
the implementation of 5G networks with leading customers,
strengthening strong local presence and competencies, and

capacities.
2. Digital Society
• development and delivery of proprietary solutions for the

healthcare, transport, public administration, public and national
safety, land registry management and infrastructure,
 
integration to maintenance, including business process
automation, analytical platforms and data systems,
 
encompasses a wide range of solutions applicable in various
business sectors; this includes integrated data management

business users, as well as advanced analytical technologies that

and informed strategic decision-making,
 
growth, development of the portfolio of solutions, improvement

3. Research & Development (R&D) and Services
 ENT R&D Center is the largest software design center in the
region and it covers all phases of software development
for telecommunications radio and core networks, including

integration,
 advanced communication networks and solutions enable

network infrastructure, while simultaneously improving
digital inclusion and driving innovation in sustainable
industries. This reduces the ecological footprint and
improves the quality of life through more advanced
connectivity and technological possibilities,
 strategic priorities include strengthening the position in
strategic areas, exploring new opportunities for growth, and

and competitiveness. provision of technical and consulting
services in the domain of system integration, planning,

 

 strategic objective is focused on achieving stable growth
in the delivery of ICT services, development of a highly
competent and competitive service center, and continuous
development and improvement of key competencies.
These strategic business segments are also the main value
chains of the ENT Group.
Table of contents
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report
Sustainability
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Financial
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Table of contents
Managament
report
Sustainability
report
Financial
statements
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45
Overview of ENT Group value chains
As of 2025, sales are tracked in parallel across the following segments:
Table of revenue disaggregation by segments in accordance with IFRS 8 (from the nancial statements, Note 6),
as required by ESRS 2, paragraph 40(b)
Upstream Own operations Downstream
 Ericsson
 Telecommunications
infrastructure
 Software licenses
 Hardware components
 Software development services in R&D
 
integration services
 Creation of e2e solutions for radio,
transmission and core networks
 
telecommunications infrastructure
 Design and development of solutions
for digital transformation in strategic
ENT areas
 
 Attracting, developing and retaining
expert employees and talents
 Software and hardware solutions for
Ericsson’s radio access and core network
 Delivery of expert services to Ericsson and
its customers
 Delivery of ICT products, solutions and
services by Ericsson, ENT and other selected
suppliers
 Delivery of advanced cloud-based
telecommunications solutions and network

 
services
 Delivery of products, solutions and services

 ICT solution implementation, integration and
maintenance services
Digital Society R&D and services Telecom Total
31 Dec 2025 31 Dec 2024 31 Dec 2025 31 Dec 2024 31 Dec 2025 31 Dec 2024 31 Dec 2025 31 Dec 2024
‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR
Sales
revenue
26.335 31.180 143.391 140.693 68,864 77,600 238,590 249,473
Operating

912 590 13,026 12,366 6,967 9,188 20,905 22,144
SBM-2 – Interests and views of
stakeholders
Continuous dialogue
ENT Group fosters continuous dialogue with its stakeholders
through diverse interaction mechanisms, ensuring two-way
communication and transparent relationship management.
Feedback, expressed interests and expectations of stakeholders


strategy. Cooperation with stakeholders is carried out through

communication channels and appeals and corrective procedures,

challenges and opportunities.
Employees and social dialogue
ENT Group actively involves employees in decision-making

and trade union representatives. A particularly important tool
for understanding employee engagement and satisfaction is
the annual Voice of ENT Group survey, the results of which are



and opportunities for professional development.
Regular cooperation with the union is carried out through
negotiations on the Agreement about Salary Policy and Other
Payments. During these negotiations, issues of material and
social security of employees, working conditions, job security
and professional development are considered. In addition to union


Management Board, Executive Management, and managers.
Customers
ENT Group systematically monitors market trends and customer
demands, ensuring the continued relevance of its solutions and
long-term partnerships with key market players. In addition to its
own internal evaluations and the collection of feedback through
customer satisfaction surveys in the Telecom segment and the



Table of contents
Management
report
Sustainability
report
Financial
statements
report
46
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
46
Suppliers

quality and sustainability of its products and services. Under its
procurement policy, the Group establishes clear standards and
requires suppliers to comply with the Code of Conduct for Business
Partners, which encompasses criteria related to human rights,
working conditions, ethical business conduct and environmental
responsibility. To ensure consistent application of these standards,
ENT Group conducts systematic assessments and audits of

participation in compliance and training programs. This approach
strengthens supply chain resilience, reduces risks, and supports
the development of sustainable business practices across the
entire partner ecosystem.
Shareholders
Shareholders are involved in strategic decision-making through
transparent communication channels and the management
structure of the company. They are informed through the
Management Board, the Investor Relations function and the
Marketing, Communications and Corporate Social Responsibility

and strategic meetings to ensure that shareholders have timely

results.
Academic community
ENT Group maintains a strong and structured cooperation with
the academic community through research projects, innovation
development, and educational programs aimed at strengthening the
professional capacities of future professionals. This cooperation
is carried out through partnerships with faculties and research

and joint projects that contribute to sustainable development
and digital transformation. One of the many high-quality initiatives
is the Ericsson Nikola Tesla Summer Camp, a summer workshop

which has involved over one thousand students over more than
two decades. In addition, ENT Group actively engages students
through student employment, mentoring programs and research
assignments, enabling them to acquire practical knowledge and
skills in a real business environment. This approach supports


competitiveness and innovation potential of both the Group and the
wider ecosystem.
Dialogue with external stakeholders
As part of the double materiality assessment conducted during
the preparation of the 2025 sustainability report, ENT Group
carried out a survey among external stakeholders. The aim was
to understand which sustainability topics are considered most
material by external stakeholders from the perspective of impacts,
risks and opportunities, as well as to collect proposals for further
improvement of the ENT Group’s performance.
The survey results revealed a high level of alignment among

the academic community, suppliers, the media, non-governmental

relevant to the long-term resilience and competitiveness of the
ENT Group. Across a large number of topics, the ratings were
consistently high and well aligned, indicating that stakeholders

while at the same time clearly articulating expectations for
further development, particularly in the context of accelerated
technological and societal change.

the ENT Group’s internal assessments are grounded in a realistic
understanding of the business model and its impacts. Stakeholders
consistently highlight skilled experts, cyber security and the ability
to deliver reliable digital solutions as core drivers of the ENT
Group’s long-term competitiveness. They place particular emphasis

as both a key strength and a key risk, fully aligned with internal

that the ENT Group’s high standards represent a foundation of
trust, accompanied by expectations of continuous adaptation to an
increasingly complex security environment.
With regard to digital solutions, the strategic direction of the




green transition. Stakeholders also underscore the importance
of a broader, ecosystem-based approach to risk management,
especially through the strengthening of cooperation with the
academic community and innovation partners, and point to rising
expectations in the areas of ethics and transparency. Climate-


internal assessments of the ENT Group, but also enriches them
with valuable insights and supports a clearer understanding of
their relevance in both the business and societal context. The high
degree of alignment between internal and external perspectives
provides strong validation of the results of the double materiality



strategic direction makes the survey a key tool for understanding
internal and external dynamics and for supporting informed
strategic decision-making by the ENT Group through to 2030.
secondary in comparison to the Group’s core strategic sources of
risks and opportunities.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
47
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
47
SBM-3 – Material impacts, risks and
opportunities and their interaction with
strategy and business model
Summary of material topics
Material topics for Ericsson Nikola Tesla Group are highlighted.
Overview of impacts, risks and opportunities of the ENT
Group


topics assessed as important. The assessment was conducted

the nature of the individual topics and the dynamics of the
business.



opportunities. Risks are most pronounced in the areas of
attracting and retaining highly skilled employees, accelerated
technological change, increasing cyber threats, and evolving
regulatory requirements related to security and compliance.



and the responsible use of technology.
Opportunities are focused on strengthening and developing key

and automation, as well as on growing demand for digital
solutions driven by the digital transformation of Croatia and

of 5G networks, railway communication systems, and the

mission critical infrastructure are particularly relevant.
Survey feedback also points to growth potential through

in the development of niche products, as well as through the

Based on the results of the assessment of impacts, risks and
opportunities, a total of 22 material and 9 important topics

customer relationships, and business conduct and information
security are among key management areas with a direct
impact on the ENT Group’s competitiveness, resilience and
stakeholder trust in the short and medium term.
Cross-cutting standards Environment Society Governance
ESRS 1 General
requirements
ESRS E1 Climate change ESRS S1 Own workforce ESRS G1 Business conduct
ESRS 2 General disclosures ESRS E2 Pollution
ESRS S2 Workers in the value
chain
ESRS E3 Water and marine
resources

communities
ESRS E4 Biodiversity and
ecosystems
ESRS S4 Consumers and
end-users
ESRS E5 Resource use and
circular economy
Topical standard Signicant topics Important topics Informational topics
ESRS E1 Climate change 2 3 4
ESRS S1 Own workforce 10 6 0
ESRS S4 Consumers and end-users 3 0 0
ESRS G1 Business conduct 7 0 0
 22 9 4
Aggregate overview of topics by thematic standards (ENT Group)
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Table of contents
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ESRS E1 Climate change

sustainability factors related to climate change mitigation,
including greenhouse gas emissions across Scope 1, Scope
2 and Scope 3, energy consumption, and activities related
to the procurement and generation of renewable energy.
The assessment also considered the contribution of the ENT
Group’s ICT solutions to a sustainable digital transition and


physical risk assessment were addressed separately. Rising

consistent signal across all locations. Additional stressors

intensity of precipitation and storm winds, which may lead to
disruptions in electricity supply and consequent operational
interruptions.
The impact review indicates that the ENT Group’s
climate-related impacts primarily relate to emissions and
energy consumption within its own operations, as well as
emissions arising in the upstream and downstream segments
of the value chain, with Scope 3 representing the dominant
share of total emissions. Within own operations, activities such
as the procurement of renewable electricity and the planned

Furthermore, ENT Group’s digital and ICT solutions generate,
and have the potential to further generate, positive impacts


infrastructure and defense systems.
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Sustainability
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49
Table of contents
Managament
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Sustainability
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Financial
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49
Description of impact, risk or opportunity
Materiality of impact,
risk or opportunity
Level of value
chain
Time horizon
Scope 1 GHG emissions



Actual negative impact
 Category: important
Own operations
Short term

and medium term

Scope 2 GHG emissions



Actual negative impact
 Category: important
Own operations
Short term

and medium term

Scope 3 GHG emissions


Actual negative impact
 Category: exceptional
Upstream and
downstream value
chain
Short term

and medium term

Energy consumption
The total energy consumption of the ENT Group in 2025 amounted to 11,625.76 MWh, of which 5,811.98 MWh related to electricity consumption and 3,657.65
MWh to thermal energy supplied from district heating systems.
Actual negative impact
 Category: important
Own operations
Short term



Purchasing energy from renewable sources


the location-based and market-based Scope 2 emissions calculation.
Potential positive impact
 Category: informative due to limited scope
Own operations
Short term

and medium term

Energy production from renewable sources
A photovoltaic power plant with a capacity of 1,244 kWp has been installed on the roof of the Group’s headquarters in Zagreb. Commissioning is planned
for the second quarter of 2026, with expected annual electricity generation of approximately 1,200 MWh. The installation is estimated to reduce

years.
Potential positive impact
 Category: informative due to limited scope
Own operations
Short term




Table of contents
Management
report
Sustainability
report
Financial
statements
report
50
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
50
Description of impact, risk or opportunity
Materiality of impact, risk or
opportunity
Level of value
chain
Time horizon
ICT solutions that support sustainable digital transition and decarbonization



10
.
An additional potential positive impact 



relevant. Such a system has not yet been established within the ENT Group.
Actual positive impact
 Category: exceptional
Potential positive impact
 Category: material
Risk
 Category: material
Entire value
chain
Short term

medium term



Climate risks for the ENT Group – physical

variability and intensity of precipitation events, and storm winds as a key stressor due to the potential for power supply disruptions and resulting

are considered to have limited operational relevance given the current business model.
Risk
 Category: informative Own operations
Short term

medium term



Climate risks for the ENT Group – transition
Transition risk 
environmental performance of downstream ICT solutions. In the context of the EU Taxonomy: ENT Group currently does not quantify emissions



regarding measurable evidence of environmental performance. Although economic activity 8.2 is taxonomy-eligible for part of the portfolio, the
absence of a demonstrable evidence framework hinders the transition from taxonomy eligibility to full taxonomy alignment.
Transition opportunity 

demonstrating the emissions reduction impacts of its solutions, thereby enhancing information comparability and credibility vis-à-vis customers



the ICT solution itself across its entire life cycle.
Risk
 Category: informative
Opportunity
 Category: informative
Downstream
value chain
Short term

and medium

10

Table of contents
Management
report
Sustainability
report
Financial
statements
report
51
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
51
Description of impact, risk or opportunity
Materiality of impact, risk or
opportunity
Level of value
chain
Time horizon
Secure employment
ENT Group ensures employment stability, with 95.97% of employees employed on permanent contracts in 2025, and 2,972 out of a total of 2,979 employees
working on a full-time basis.
Actual positive impact
• Category: important Own operations
Short term

and medium

Adequate wages

of the salary system. The assessment of an adequate salary was carried out by comparing the lowest salary of all employees with 60% of the national
median salary or, in cases where this data was not available, by comparing the lowest employee salary with 50% of the national average salary. The
annual total remuneration ratio in 2025 of the President of the Management Board of Ericsson Nikola Tesla to the median annual total remuneration for
all employees is 9.15.
Actual positive impact
• Category: material Own operations
Short term

and medium

Social dialogue
The employee union is the company’s key social partner, with whom it regularly cooperates through information and consultation in accordance with
the Labor Act.
Actual positive impact
• Category: important
Own operations
Short term

and medium

ESRS S1 Own workforce
The double materiality assessment encompassed all matters related to working
conditions, as well as equal treatment and equal opportunities for all employees of the
ENT Group. Other labor rights are not relevant to the Group’s business model. In the

development and retention of skilled employees and talent, and the share-based


intelligence and automation.
The review of impacts, risks and opportunities indicates that the ENT Group maintains a

within its own operations. This includes a high share of permanent employment
contracts, the application of national benchmark values in assessing pay adequacy, a

system, and the management of privacy with no recorded breaches in 2025. Continuous


At the same time, the analysis clearly shows that key risks and opportunities are
concentrated in the area of human capital and digital competencies: the attraction,
development and retention of skilled employees have been assessed as a critical risk and
an opportunity with exceptional potential. Strengthening competencies in

of future competitiveness, accompanied by associated operational and
skills-related risks.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
52
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
52
Description of impact, risk or opportunity
Materiality of impact, risk or
opportunity
Level of value
chain
Time horizon
Freedom of association, the existence of works councils and the information, consultation and participation rights of workers
At Ericsson Nikola Tesla, employees are represented by 13 union representatives, who act as the works council in protecting and promoting their rights
and interests with the employer. The workers’ council was not established because a union proposal was not submitted nor was it requested by at least
20% of the employees, as prescribed by Article 141 of the Labor Act.
Actual positive impact
 Category: important Own operations
Short term

and medium

Collective bargaining, including rate of workers covered by collective agreements
Annual negotiations on salary policy and material and social security take place between the negotiating committees of the trade union and the

to employees in a timely manner through internal communication channels.
Actual positive impact
• Category: important Own operations
Short term

and medium

Work-life balance


basis, depending on business needs and agreement with their supervisors. In 2025, 10.95% of employees were entitled to family leave, of whom 70.29%
made use of this right. Men accounted for 41.53% and women for 28.75% of employees entitled to family leave.
Actual positive impact
• Category: important
Own operations
Short term

and medium

Health and safety
All employees of the ENT Group are covered by an occupational health and safety management system based on risk assessment, internal audits and

system contribute to a high level of employee safety, with no work-related injuries recorded in 2025.
Actual positive impact
• Category: material Own operations
Short term

and medium

Gender equality and equal pay for work of equal value
The unadjusted gender pay gap, without corrections for structural factors, amounts to 10.6% in favor of men and is primarily concentrated in the

trend is partly associated with women having, on average, approximately 7% shorter tenure and longer career breaks in earlier career stages, as well

Actual positive impact
• Category: material
Own operations
Short term

and medium

Training and skills development
ENT Group continuously invests in employee development through annual performance assessment cycles and talent management, supported by the
Individual Performance Management and Talent Management tools, as well as its proprietary Elementis platform. By the end of 2025, approximately 150
internal training courses were available on the Elementis platform. In 2025, more than 72,000 training hours were completed, with around 92% employee


Actual positive impact
• Category: exceptional Own operations
Short term

and medium

The employment and inclusion of people with disabilities
The employment process at ENT Group is based on objective criteria and equal opportunities for all candidates, including people with disabilities,
to whom working conditions are adapted. In 2025, the company employed 21 persons with disabilities, representing 0.73% of the total workforce, in

Actual positive impact
• Category: important Own operations
Short term

and medium

Table of contents
Management
report
Sustainability
report
Financial
statements
report
53
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
53
Description of impact, risk or opportunity
Materiality of impact, risk or
opportunity
Level of value
chain
Time horizon
Measures against violence and harassment in the workplace
ENT Group applies fair and transparent working conditions through systematic mechanisms for the protection of human and work-related rights.

reports. Employees can report irregularities to the Committee for the Protection of Employee Dignity, via mailboxes at locations in Zagreb, Split and

Actual positive impact
• Category: material
Own operations
and downstream
Short term

and medium

Diversity
By 2025, the ENT Group met its target related to gender representation on the Supervisory Board, with women representing 40% of its members.
Women accounted for 19% of Executive Management positions and 29% of line management roles. The workforce age structure is well balanced, with the

Actual positive impact
• Category: material
Own operations
Short term

and medium

Privacy


managers, relevant departments and contractual partners, with systematic monitoring measures. Training employees on privacy protection is a
key part of the Code of Business Ethics, and all new employees and students undergo training. All employees are trained on personal data protection,
and new employees and students attend introductory training as part of the Code of Business Ethics. In 2025, no personal data breaches have been
recorded.
Actual positive impact
• Category: material Own operations
Short term

and medium

Specic impact, risk and opportunity: Attracting, developing and retaining expert employees and talents
Skilled professionals and talent are critical to the competitiveness and innovation capacity of the ENT Group, particularly in the area of digital solutions
for public services, cyber security, and the development of solutions contributing to climate and social objectives. ENT Group ensures stable working
conditions, continuous training and skills development, as well as employee retention programs, thereby supporting the renewal and strengthening
of key competencies in a dynamic ICT environment. Feedback from the survey highlights the need for stronger and more structured cooperation with


a limited domestic labor market and accelerated technological change increase the risk of workforce shortages and the departure of key employees,

academic community, the attraction of experienced professionals, and the targeted strengthening of competencies in areas with growing demand.
Actual positive impact
• Category: exceptional
Risk
• Category: critical
Opportunity
• Category: exceptional potential
Own operations
Short term

and medium

Specic impact: Stock share program
ENT has operated a share award program since 2004 as a tool for employee motivation and retention, through the allocation of performance-based
shares and loyalty shares. In 2025, a total of 2,915 shares were exercised to 167 employees under programs from previous years. Since the inception of
the program, more than 1,400 employees have participated, with over 70,000 shares allocated in total.
Actual positive impact
• Category: material
Own operations
Short term

and medium

Specic impact, risk and opportunity: Enhancing employees’ digital competencies in the eld of Articial Intelligence and Automation





further points to the need for targeted upskilling through a combination of internal training and the recruitment of experienced professionals with


Actual positive impact
• Category: material
Risk
• Category: material
Opportunity
• Category: material
Own operations
Short term

and medium

Table of contents
Management
report
Sustainability
report
Financial
statements
report
54
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
54
Description of impact, risk or opportunity
Materiality of impact, risk
or opportunity
Level of value
chain
Time horizon
Customer and end-user privacy
ENT Group protects information and privacy through the application of the international ISO 27001 standard, compliance with the General Data Protection Regulation

customers and users. Since ENT Group’s business relationships are focused primarily on commercial customers, while end users are located further down the
value chain, there is no separate policy for protecting their data. Their rights are covered by existing security requirements, exchange of contractual obligations
with customers, and the alignment of internal policies. Transparency is further ensured through anonymous whistleblowing channels, with all received reports
systematically reviewed and, where appropriate, reported to the competent authorities. Responsibility for data security management lies with the business unit

Actual positive impact
• Category: material
Own operations
and downstream
Short term

and medium

Responsible marketing practices


Actual positive impact
• Category: material
Own operations
and downstream
Short term

and medium

Customer satisfaction
The ENT Group’s continuous investment in employee competency development and monitoring of technological trends enables the delivery of solutions that address


highest-rated R&D service provider within Ericsson. This strengthens long-term customer relationships and ensures a stable positive impact on end users of digital

timeliness, solution security and long-term competitiveness. Opportunities to strengthen market position and drive growth lie in the digital transformation of Croatia

the development of 5G-based railway communication networks, and projects related to the digital transformation of public services, national and public safety, and
mission critical infrastructure. Survey feedback indicates that the ENT Group also sees potential for growth and market position strengthening through enhanced


development of digital solutions that simultaneously contribute to climate and social objectives.
Actual positive impact
• Category: exceptional
Risk
• Category: material
Opportunity
• Category: exceptional
potential
Own operations
and downstream
Short term

and medium

ESRS S4 Consumers and end-users
The double materiality assessment covered relevant sustainability matters related to impacts concerning information for consumers and/or end users, as well as their social inclusion. In line with the ENT

As the ENT Group operates primarily in the B2B segment, direct relationships are focused on commercial customers, while end users are positioned further downstream in the value chain. Nevertheless,

healthcare, security and critical infrastructure.
The analysis of impacts, risks and opportunities indicates that the ENT Group maintains a high level of data security, compliance with international standards and responsible communication regarding

technological change, shortages of ICT professionals and increasing cyber threats.




Table of contents
Management
report
Sustainability
report
Financial
statements
report
55
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
55
Description of impact, risk or opportunity
Materiality of impact, risk
or opportunity
Level of value
chain
Time horizon
Corporate culture


the Code of Conduct for Business Partners obligate all involved parties to adhere to the principles of ethical business conduct, while reporting channels are accessible to all

framework, particularly when collaborating with innovative companies and entering new business segments.
Actual positive impact
• Category: material
Entire value chain
Short term

and medium

Protection of whistleblowers


protection of the reporting individual and through a clear and transparent investigation process.
Actual positive impact
• Category: material
Own operations
and downstream
Short term

and medium

Political inuence and lobbying activities


the aforementioned Act, are considered lobbying. The company regularly participates in conferences, public consultations on draft regulations, and other activities

activities. The political engagement of employees is completely separate from their professional roles and the business of ENT Group.
Actual positive impact
• Category: material
Own operations
and downstream
Short term

and medium

ESRS G1 Business conduct
The double materiality assessment covered relevant factors related to the ENT Group’s business conduct. These include
corporate culture, whistleblower protection, political engagement and lobbying, supplier relationship management, as well as


The analysis indicates that the ENT Group operates across the entire value chain in accordance with clear ethical principles and


compliance training continued to be implemented systematically.
Supplier management is based on transparent procedures and compliance checks, with no legal proceedings related to late

the same time, as a material risk at the level of the entire value chain, with the application of the Secure by Design and Privacy
by Design principles and alignment with the NIS2 Directive representing key elements in maintaining resilience and stakeholder
trust.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
56
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
56
Description of impact, risk or opportunity
Materiality of impact, risk
or opportunity
Level of value
chain
Time horizon
Management of relationships with suppliers including payment practices



communication with suppliers. In 2025, the companies of the ENT Group were not subject to any court proceedings related to late payments.
Actual positive impact
• Category: material
Upstream and
own operations
Short term

and medium

Corruption and bribery — Prevention and detection including training

and other stakeholders may report concerns through both anonymous and non-anonymous reporting channels, and all reports are duly investigated. In 2025, training

interest and fair competition. At the same time, a new cycle of the mandatory annual business compliance training was launched via the internal learning platform. In
2025, all new employees, consultants and students were required to read and sign the Code of Business Ethics.
Actual positive impact
• Category: material
Entire value
chain
Short term

and medium

Corruption and bribery - Incidents

Actual positive impact
• Category: material
Entire value
chain
Short term

and medium

Specic impact and risk – Information and cyber security
The systematic integration of information security into the ENT Group’s business processes, including the application of the Secure by Design and Privacy by Design

integrity and availability of information. This reduces the likelihood of cyber incidents, ensures business continuity, and strengthens the trust of customers, partners
and other stakeholders. Feedback from the survey highlights the growing importance of cyber security in light of the EU and global context and the continuous increase


and evolving regulatory requirements, which necessitate continuous investment, ongoing adaptation of security controls, and further development of employee
competencies.
Actual positive impact
• Category: exceptional
Risk
• Category: material
Entire value
chain
Short term

and medium

Table of contents
Management
report
Sustainability
report
Financial
statements
report
57
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
57
Impact, risk and opportunity management
Material impacts, risks and opportunities and their
interaction with strategy and business model
The ENT Group manages its strategy and business model
through a value chain that encompasses upstream inputs, own
operations, and downstream relationships with customers
and end users in a B2B environment. Upstream inputs include
the labor market, universities, as well as technological and
other suppliers and partners. Own operations comprise the
development, delivery and maintenance of solutions, as well
as the management of competencies, energy and control
frameworks. The downstream part of the value chain relates
to relationships with customers and end users.
This structure enables a clear linkage between the key

materiality assessment and the Group’s main business

chain, where the dominant share of emissions arises from
Scope 3, complemented by measures within Scope 1 and
Scope 2. Furthermore, the availability and development of ICT
competencies determine the quality and security of delivery.
Customer satisfaction represents a downstream outcome of
stable and timely delivery, while the management of privacy
and personal data protection constitutes a prerequisite for
projects with high data security requirements.
Within this framework, information and cyber security
represent a material topic that is critical for business
continuity and resilience. The level of resilience to disruptions


ENT Group’s reputation. The quality of upstream inputs from

and related control requirements. In the downstream part,

customer support, and indirectly in the security and reliability
of systems for end users.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
58
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
58
Material topic Impact on strategy and business model Risks Opportunities Connection to value chain
Decarbonization
across the value
chain
(ESRS E1, ESRS
S4)
The dominant share of emissions in Scope 3 means that
the climate impacts of the ENT Group can be reduced
only if measures are also implemented across the value

While Scope 1 and Scope 2 emissions, as well as energy
consumption, remain important for the day-to-day
management of operations, without changes in the value
chain their contribution to reducing total emissions
remains limited.
The procurement of electricity from renewable sources

the Group’s own operations and constitutes a Scope 2
emissions reduction measure. Furthermore, a planned
photovoltaic power plant at the same location, expected
to become operational in the second quarter of 2026,

operations and reduce dependence on external energy
sources.
The transition risk arises from the currently limited
ability to fully and consistently demonstrate the
downstream environmental impacts of ICT solutions,
which complicates the shift from taxonomy eligibility to
full taxonomy alignment under activity 8.2. At present,
the ENT Group does not quantify emissions associated
with the use of sold products and services within Scope 3



introduced, calculating emissions during the use phase
of the solutions represents only one component of the
required information. To demonstrate actual emissions
reductions in line with the requirements of activity 8.2,

determine the system boundaries of the assessment,
apply consistent emission factors, and calculate the net
impact which includes emissions generated by the ICT
solution itself across its entire life cycle.
The potential positive impact arises from
the ability of the ENT Group’s solutions
to support customers and end users in

reducing emissions. This includes process


related to the use of sold products and

an approach enables a clearer understanding
of where emissions occur and the magnitude
of reductions that can be achieved through
improvements in system performance,
thereby creating opportunities for tangible

Entire value chain:
Group is predominantly driven by Scope 3 emissions,
which arise upstream in the value chain through the
procurement of goods and services, and downstream
through emissions associated with the use of sold
products and services by customers and end users.
Within its own operations, the topic covers Scope 1
and Scope 2 emissions as well as energy consumption,
with emissions reductions being achieved through the
procurement of electricity from renewable sources
for the Zagreb location and a planned photovoltaic
power plant at the same location. In the downstream
value chain, ICT solutions have the potential to support
emissions reductions for customers and end users,
subject to the establishment of a clear and consistent

of the assessment, emission factors, and a net impact
calculation that also accounts for emissions generated

Attracting,
developing and
retaining key
talents and
competences
(ESRS S1, ESRS
S4)
The attraction, development and retention of key talents
and competencies form the foundation of the ENT Group’s

expertise determines the quality, security and timeliness
of solution delivery, as well as the stability of customer
relationships in a B2B environment. Competencies are
maintained through stable working conditions, continuous
training and employee retention programs. In 2024, the
focus was placed on talent attraction and development
and on the program of awarding shares, while in 2025
additional emphasis was placed on strengthening digital

automation, as well as on enhanced cooperation with
universities to ensure the long-term availability of

intelligence and sustainability metrics.
A shortage of ICT professionals, accelerated
technological change and the growing level of cyber
threats increase the risk of workforce shortages and


solutions, customer satisfaction and the market position
of the ENT Group.
Opportunities arise through targeted
strengthening of competencies that support
growth and the delivery of solutions in

technologies, private 5G networks, 5G

networks, as well as projects related to

and critical infrastructure. Additional

transport and energy infrastructure and
the development of solutions with climate
and social contributions. A further important


enterprises in the development of niche
products, enabling faster innovation cycles
and improved responsiveness to market
needs.
Entire value chain: The management of talent and
key ICT competencies relies on upstream inputs
such as labor market availability and cooperation with
universities and educational institutions, as well as on

skill sets. Within the Group’s own operations, the topic
is addressed through the attraction, development and
retention of employees, as well as through training
programs, thereby ensuring the capacity to keep
pace with technological developments and to ensure
high-quality and secure deliveries. In the downstream

implementation of and support for customer solutions,
as well as in long-term customer relationships and
competitiveness. In a B2B business model, the impacts
are also indirectly transferred to end users through
the security and reliability of the systems provided.
Customer
satisfaction
(ESRS S4 , ESRS
S1 and ESRS G1)


technology monitoring, and timely and high-quality

customer relationships, while also generating an indirect
positive impact on end users through reliable and secure
systems.
A shortage of ICT professionals, accelerated
technological developments and the increasing level of

the security of solutions, which could in turn impact
customer satisfaction and the market position of the ENT
Group.
Growth opportunities arise from the
development and delivery of solutions in

technologies, private 5G networks, 5G

networks, as well as from projects related

and critical infrastructure. Additional

of transport and energy systems, the
development of solutions with climate- and

for enhanced cooperation with small and

of niche products, enabling faster innovation
cycles and improved market responsiveness.
Entire value chain:
Customer satisfaction is driven by the quality of
delivery, implementation and support of solutions in the
downstream part of the value chain, and depends on
upstream supplier inputs as well as on the ability
of the Group’s own operations to deliver solutions
in a timely, secure and reliable manner. Employee
competencies play a key role, as the attraction,
development and retention of talent ensure delivery
stability and directly shape the customer experience.
In a B2B environment, the impacts are also indirectly
transferred to end users through the security and
reliability of the systems and solutions.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
59
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
59
Material
topic
Impact on strategy and business
model
Risks Opportunities Connection to value chain
Privacy and
protection of
personal data
of customers
and end users
(ESRS S4, ESRS
S1, ESRS G1)
Privacy and personal data protection are
critical for the ENT Group, as they determine
the ability to contract, develop and maintain
ICT solutions, particularly in projects
with high data protection requirements.
Reliable personal data management is
based on employee expertise; therefore,



prerequisite for the secure and compliant
delivery of solutions and for maintaining the
trust of customers and partners.
Residual risks are associated with the potential

non-compliant processing of personal data within
delivered ICT solutions. These risks increase if

are not regularly updated or if employees do not

to handle data in accordance with regulatory
requirements and internal policies. This may
compromise the security of solutions, customer
trust and the stability of business relationships.
Opportunities arise from the consistent
application of data protection requirements
throughout the entire life cycle of solutions. The
systematic implementation of the Privacy by
Design principle, internal policies and procedures,

obligations strengthens the ENT Group’s ability to
meet high customer requirements and increases
the success rate of project contracting. When
roles and responsibilities in data processing are

more stable and the risk of misunderstandings
and escalations is reduced. Embedding data
protection into standard processes reduces
the need for subsequent corrections during
implementation and upgrades, thereby enhancing

delivery.
Entire value chain: Privacy and personal data protection are primarily
addressed in the downstream part of the value chain, through the
delivery, implementation and support of ICT solutions, as well as through
contractual relationships with customers. In a B2B business model,
the impacts are also indirectly transferred to end users through the
security and lawfulness of data processing.
Within the Group’s own operations, the topic is managed through


data protection principles in the development and delivery of solutions
and the handling of whistleblowing reports.
Upstream, the level of personal data protection depends on the
technologies, components and services provided by suppliers, as well as

Information and
cyber security
– business
continuity and
resilience (ESRS
G1, ESRS S1)
Security is both an operational and a
strategic prerequisite for the stable
delivery and maintenance of the ENT Group’s
ICT solutions. It determines the resilience
of services to disruptions and their ability
to operate reliably in the day-to-day
activities of customers and partners. A



contractual obligations and the protection
of reputation. The faster the recovery
capability and the lower the impact on
customers, the more resilient and, in
the long term, sustainable the business
becomes.
Residual risk stems from the increasing
complexity and dynamics of cyber threats, as
well as from the need for continuous adaptation
to evolving regulatory requirements. The risk

of incidents that may compromise service

of information, with implications for business
continuity, remediation costs, contractual
relationships and reputation. An additional


areas, which may increase exposure and reduce

Opportunities arise from strengthening business
resilience through the systematic integration
of security into the design and delivery of
solutions, as well as through the development of
prevention, detection and recovery capabilities.
Such an approach reduces the likelihood of
disruptions, enhances the predictability of
delivery and maintenance, and reinforces the ENT
Group’s reliability as a partner in projects with
high security requirements. Consistent security
management supports the long-term stability
of customer relationships and enables the ENT
Group to deliver projects in an environment of
increasing requirements without compromising
service quality or continuity.
Entire value chain: Information and cyber security spans the entire
value chain and depends on the quality of upstream inputs from


the solutions. Within the Group’s own operations, security is ensured


requirements into processes and solution design, with the objective of
safeguarding business continuity and resilience. In the downstream
part 
implementation and support of customer solutions, as well as in service
stability and availability; in a B2B business model, the impacts are also
indirectly transferred to end users through the security and reliability
of the systems.
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Strategic materiality map
Strategic materiality map illustrates how the material impacts, risks and

integrated into the ENT Group’s strategy and business model across the
entire value chain. It visually connects upstream inputs, own operations
and downstream customer relationships, highlighting where key impacts
arise and how they shape delivery capability, business resilience and
long-term value creation. In doing so, it ensures a transparent linkage
between material topics and key business levers, in line with the
requirements of the ESRS framework.
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IRO-1 – Description of the processes to
identify and assess material impacts, risks
and opportunities
The process of identifying and assessing material impacts, risks and
opportunities within the ENT Group is carried out as an integral part of

the risk assessment framework is directly embedded in assessments

1. Integration into risk management

opportunities are carried out through the ERM system, aligned with ISO
31000:2018 and the COSO ERM framework. Assessments are performed

responsibilities and regular monitoring conducted through a reporting
system at Executive Management level.
2. Assessment methodology
The assessment is based on internal policies and combines qualitative
and quantitative methods. It includes an assessment of the likelihood
of occurrence, potential impact and interdependencies of risks, as well


consistency and comparability.
3. Data used
Both internal and external sources are used in the assessments,


security records, industry practices, and stakeholder feedback.
4. Supervision and specic reviews
Security, Risks and Compliance Board oversees the implementation of
policies and the management of key risks. In early 2025, a Framework for
Sensitive Business Activities in the area of human rights protection was



with conditions or rejection. In 2025, a total of 32 business opportunity


Results of the double materiality assessment: specic topics and
changes


opportunities in accordance with ESRS 1 AR 16, taking into account





1. Attracting, developing and retaining expert employees and talents
within ESRS S1
2. Program of awarding shares within ESRS S1
3. Customer satisfaction within ESRS S4

were included in the assessment in the 2025 reporting period:
 
Intelligence and Automation within ESRS S1
2. Information security within ESRS G1
Key stakeholders and their relevance
The stakeholders of ENT Group include shareholders, employees,
customers, suppliers, the academic community and regulatory
authorities. The company has been continuously cooperating with
these stakeholders in order to assess the impact of its operations and
business relationships, ensuring appropriate mechanisms of reporting
and protection in terms of actual or potential negative impacts, and
responsible business.
Business relationships and activities in the value chain
ENT Group maintains a network of business relationships that includes:
 Upstream suppliers
technology suppliers such as Ericsson, provided
telecommunications infrastructure, software licenses
and hardware components; supplier management based on
criteria of technological excellence, security, sustainability
and regulatory compliance.
 Internal operations
its own technological capacities, with an emphasis on
innovations in telecommunications and digital solutions.

strategic talent management, and ensuring sustainable and
secure business processes.
 Downstream relationships
Ericsson, telecommunications operators, the public sector

solutions are delivered. Although there is no direct

through digital infrastructure and user experience.
Methodological framework for identication and
assessment of impacts, risks and opportunities

impacts, risks and opportunities, ENT Group has applied
a structured approach within the double materiality assessment,
encompassing the following elements:
 mapping business relationships and activities
points within the value chain along with assessed environmental, social and

 stakeholder analysis 

mechanisms; During the reporting period, a survey was also conducted.
Details are described in the section on Dialogue with External
Stakeholders, and the survey results were incorporated into the

 assessment of material impacts
governance impacts associated with business operations and value chain

 risk and opportunity analysis

and market conditions were assessed. In the risk assessment process,
ENT Group also relied on the results of an internal key risk assessment
conducted at the beginning of 2024.

analysis of sustainability matters in accordance with ESRS 1 AR 16, taking

To assess the materiality of the impact, the ESRS criteria of scale, scope,
irremediable character and probability were applied, while the criteria of

In the assessment, 18 categorical variables were included using a scale from
1 to 5, including binary assessments of actuality or potentiality of impact,


diligence.



strengthening employees’ digital competencies in the area of
articial intelligence and automation, which was assessed as a material
actual positive impact with a material risk and a material opportunity, and
information security, which was assessed as a material actual positive
impact with a material risk at the level of the entire value chain.
To ensure a consistent and comparable assessment, thresholds were



depending on the assessed severity and likelihood. This approach enables a

the most material sustainability matters.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
62
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
62
ESRS E1 Climate change (Climate change
adaptation)
Procedure and methodology
In 2025, ENT Group conducted a structured assessment of physical
climate risks by applying a three-step methodological framework
based on ISO 14091:2021 and ESRS E1 requirements. The assessment


conditions covering the period from 1990 to 2025. Furthermore,










physical climate risks, encompasses projections until 2050 and 2100,


the general approach of the ENT Group described in Chapter BP-2,

trends are assessed primarily through multi-decadal projections.
The assessment is structured around three key dimensions:
 

 
vulnerability, including buildings, energy infrastructure, IT systems,
and working conditions,
 



the adaptation mechanisms.
Identied climate hazards and risk assessment


climate context of South-Eastern Europe were considered. Climate



quantitative analysis.
Climate hazard Type of risk Vulnerability Risk Key comment
Air temperature /
heatwaves
Chronic
physical
Medium Medium Increasing trend across all locations; impacts on cooling
requirements and productivity
Wind / storm events Acute
physical
Medium Medium Episodic extremes; risk of power supply disruptions and
infrastructure damage
Precipitation (intense
episodes)
Acute
physical
Medium Medium 
on drainage systems
Solar radiation Chronic
physical
Medium Low No increasing exposure; limited impact on indoor thermal
load
Snow and ice Acute
physical
Low Low Decreasing exposure trend; impacts limited to logistics
Soil moisture Chronic
physical
Low Low No material impact on the business model
By integrating exposure and vulnerability, the following assessment
of physical climate risks was determined:

Heatwaves and increasing air temperatures, strong winds, and





in climate-related pressure, particularly with regard to thermal
extremes and energy demand for cooling.
Transition risks and opportunities
Procedure and methodology

opportunities as part of the double materiality assessment.
Unlike physical climate risks, which were assessed on the basis
of quantitative climate projections, the assessment of transition
risks is based on a qualitative analysis of the regulatory landscape,
market trends and the ENT Group’s business model in the context of
the transition to a low-carbon economy.
Time horizons
Transition risks and opportunities were assessed for the


out in Chapter BP-2. A long-term assessment was not conducted,
which is consistent with the ENT Group’s general approach. The

that transition-related developments relevant to the ICT sector,

as well as the requirements of the EU Taxonomy, typically

Methodological approach

• an analysis of the regulatory framework, including the
requirements of the EU Taxonomy and the CSRD, with a particular


• an analysis of market trends and customer expectations

solutions,
• an analysis of the ENT Group’s greenhouse gas inventory, with


Table of contents
Management
report
Sustainability
report
Financial
statements
report
63
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
63
Disclosure
requirement
Description Chapter Page
Cross-cutting standards
ESRS 2 - General disclosures
Basis for preparation
BP-1 General basis for preparation of sustainability statements 27
BP-2  28
GOV-1 The role of the administrative, management and supervisory bodies 30
GOV-2
Information provided to and sustainability matters addressed by the
undertaking’s administrative, management and supervisory bodies
38
GOV-3 Integration of sustainability-related performance in incentive schemes 39
GOV-4 Statement on due diligence 40
GOV-5 Risk management and internal controls over sustainability reporting 41
Strategy
SBM-1 Strategy, business model and value chain 44
SBM-2 Interests and views of stakeholders 45
SBM-3
Material impacts, risks and opportunities and their interaction with strategy and
business model
47
Impact, risk and opportunity management
IRO-1
Description of the processes to identify and assess material impacts, risks and
opportunities
61
IRO-2
Disclosure Requirements in ESRS covered by the undertaking’s sustainability
statement
64
MDR-P Policies adopted to manage material sustainability matters 35
MDR-A Actions and resources in relation to material sustainability matters See MDR-P, SBM-3, S1-1 35, 47, 85
MDR-M Metrics in relation to material sustainability matters See MDR-P,SBM-2, S1-2 35, 45, 86
MDR-T 

impact - program of
awarding shares
89, 91, 98
• the integration of results into the double materiality
assessment framework through the ENT Group’s overall ERM
system.

potential market and reputational pressure arising from

ICT solutions, as well as a transition opportunity to strengthen
market positioning through the introduction of emissions

description is provided in the material topics table.
Risk management and integration into business processes
The results of the assessment were integrated into the ENT
Group’s double materiality assessment framework and were used

with ESRS. Physical climate risks are monitored within the Group’s
risk management system, with the Business Continuity Management

climate risks and opportunities are monitored within the same ERM
system, with an emphasis on monitoring regulatory developments
and market requirements.

compliance with ESRS 2 IRO-1, which comprises both physical and
transition climate risks. In the previous reporting period, an
internal preliminary assessment was conducted; however, it was
not aligned with the methodological requirements of the standards.
ESRS 2 IRO-1 – Description of the processes to identify
and assess material impacts, risks and opportunities:
Pollution (ESRS E2), Water and marine resources (ESRS E3),
Biodiversity and ecosystems (ESRS E4), Resource use and
circular economy (ESRS E5), Workers in the value chain (ESRS
S2), Aected communities (ESRS S3)
Taking into account ENT Group’s business model, which is based

the provision of ICT services without industrial processes and
management of physical resources, the impacts arising from
pollution, water consumption, pressure on marine resources,
degradation of biodiversity, circular use of materials, treatment of

were not assessed as material.
ENT Group does not manage plants, nor does it participate in the
processes which include the emission of harmful substances, use of
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Sustainability
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Table of contents
Managament
report
Sustainability
report
Financial
statements
report
64
Disclosure
requirement
Description Chapter Page
Topical standards
ESRS E1 Climate change
ESRS E1-1
Transition plan for climate change mitigation
77
ESRS 2 IRO-1
Description of the processes to identify and assess material climate-related impacts,
risks and opportunities
49, 65
ESRS E1-2
Policies related to climate change mitigation and adaptation
77
ESRS E1-3
Actions and resources in relation to climate change policies
77
ESRS E1-4
Targets related to climate change mitigation and adaptation
78
ESRS E1-5
Energy consumption and mix
78
ESRS E1-6
Gross Scopes 1, 2, 3 and Total GHG emissions
80
ESRS E1-7

82
ESRS E1-8
Internal carbon pricing
82
ESRS E1-9

climate-related opportunities
83
ESRS S1 Own workforce
ESRS S1-1
Policies related to own workforce
85
ESRS S1-2
Processes for engaging with own workers and workers’ representatives about impacts
86
ESRS S1-3
Processes to remediate negative impacts and channels for own workers to raise
concerns
86
ESRS S1-4
Taking action on material impacts on own workforce, and approaches to mitigating
material risks and pursuing material opportunities related to own workforce, and

87
ESRS S1-5
Targets related to managing material negative impacts, advancing positive impacts, and
managing material risks and opportunities
89
ESRS S1-6
Characteristics of the undertaking’s employees
91
ESRS S1-7
Characteristics of non-employees in the undertaking’s own workforce
-
ESRS S1-8
Collective bargaining coverage and social dialogue
see S1-2 86
IRO-2 – Requirements in ESRS covered by the
undertaking’s sustainability statements
Overview table of all covered requirements
resources or direct environmental impacts. Moreover, ENT Group

technology, where ENT does not exercise a material impact on the
working conditions of third parties. Based on the business activities
of ENT Group, reporting on impacts on civil, political, economic, social
and cultural rights of communities and the rights of indigenous

Due to the lack of material impacts in the mentioned topical areas,

assess material impacts, risks and opportunities related to

material through the initial sustainability assessment, which is
based on the analysis of business model, sector characteristics,
and the existing business practices. Accordingly, the disclosure
requirement according to ESRS 2 IRO-1 is not applicable in the
context of the above standards.

and already adopted EU regulatory framework, in particular the EU Taxonomy

than from uncertainty related to future climate or energy transition pathways.




was conducted on the basis of a qualitative analysis of the current regulatory
framework and anticipated market expectations regarding the substantiation

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Disclosure
requirement
Description Chapter Page
ESRS S1-9
Diversity metrics
93
ESRS S1-10
Adequate wages
93
ESRS S1-11
Social protection
93
ESRS S1-12
Persons with disabilities
93
ESRS S1-13
Training and skills development metrics
94
ESRS S1-14
Health and safety metrics
97
ESRS S1-15
Work-life balance metrics
98
ESRS S1-16

98
ESRS S1-17
Incidents, complaints and severe human rights impacts
98
Specic impact
Stock share program
98
ESRS S4 Consumers and end-users
ESRS S4-1
Policies related to consumers and end-users
99
ESRS S4-2
Processes for engaging with consumers and end-users about impacts
99
ESRS S4-3
Processes to remediate negative impacts and channels for consumers and end-users to raise
concerns
99
ESRS S4-4
Taking action on material impacts on consumers and end-users, and approaches to managing
material risks and pursuing material opportunities related to consumers and end-users, and

99
ESRS S4-5
Targets for managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities
100
ESRS G1 Business conduct
ESRS G1-1 Business conduct policies and corporate culture 103
ESRS G1-2 Management of relationships with suppliers 106
ESRS G1-3 Prevention and detection of corruption and bribery 106
ESRS G1-4  107
ESRS G1-5  107
ESRS G1-6 Payment practices 107
Specic impact  108
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Table of contents
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report
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report
Financial
statements
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66
Overview table of data in cross-cutting and topical
standards that derive from other EU legislation
Disclosure
requirement
Description Datapoint Sustainable Finance Disclosures
Regulation
Pillar 3 reference Benchmark Regulation Climate Law Page /
materiality
ESRS 2 GOV-1 Board’s gender diversity  Indicator n. 13 in Table I of Annex I Commission Delegated

2020/1816, Annex II
Page no. 30
ESRS 2 GOV-1 Percentage of board members who
are independent
 Delegated Regulation

Page no. 30
ESRS 2 GOV-4 Statement on due diligence 30 Indicator n. 10 in Table III of Annex I Page no. 40
ESRS 2 SBM-1 Involvement in activities related to
fossil fuel activities
 Indicator n. 4 in Table I of Annex I 
575/2013
Commission Implementing Regulation

information on Environmental risk
and Table 2: Qualitative information
on Social risk
Delegated Regulation

Not material
ESRS 2 SBM-1 Involvement in activities related to
chemical production
 Indicator n. 9 in Table II of Annex I Delegated Regulation

Not material
ESRS 2 SBM-1 Involvement in activities related to
controversial weapons
 Indicator n. 14 in Table I of Annex I Not material
ESRS E1-1 Transition plan to reach climate
neutrality
14. 
2021/1119, Article

Page no. 77
ESRS E1-1 Undertakings excluded from Paris-
aligned Benchmarks
 
575/2013; Commission Implementing


transition risk: Credit quality of
exposures by sector, emissions and
residual maturity
Delegated Regulation



Not material
ESRS E1-4 GHG emission reduction targets 34 Indicator n. 4 in Table II of Annex I 
575/2013
Delegated Regulation

Page no. 78
ESRS E1-5 Energy consumption from fossil
sources disaggregated by sources
38. Indicator n. 5 in Table I and indicator n.
5 in Table II of Annex I
Page no. 78
ESRS E1-5 Energy intensity associated with
activities in high climate impact
sectors
40.-43. Indicator n. 6 in Table I of Annex I Not material
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statements
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67
Disclosure
requirement
Description Datapoint Sustainable Finance Disclosures
Regulation
Pillar 3 reference Benchmark Regulation Climate Law Page /
materiality
ESRS E1-6 Gross Scope 1, 2, 3 and Total GHG
emissions
44. Indicator n. 1 and 2 in Table I of
Annex I

Commission Implementing Regulation


Credit quality of exposures by sector,
emissions and residual maturity
Delegated Regulation


Page no. 80
ESRS E1-6 Gross GHG emissions intensity 53.-55. Indicator n. 3 in Table I of Annex I 
Commission Implementing Regulation

Climate change transition risk: alignment
metrics
Delegated Regulation


Page no. 82
ESRS E1-7 GHG removals and carbon credits 56. 
2021/1119, Article

Not material
ESRS E1-9 Exposure of the benchmark portfolio
to climate-related physical risks
66. Delegated Regulation

Delegated Regulation

Not material
ESRS E1-9 Disaggregation of monetary amounts
by acute and chronic physical risk
 
Commission Implementing Regulation

Template 5: Banking book - Climate
change physical risk: Exposures subject
to physical risk.
Page no. 83
ESRS E1-9 
material physical risk
 
Commission Implementing Regulation

Template 5: Banking book - Climate
change physical risk: Exposures subject
to physical risk.
Page no. 83
ESRS E1-9 Breakdown of the carrying value of
its real estate assets by energy-

 
Commission Implementing Regulation


risk: Loans collateralised by immovable

collateral
Not material
ESRS E1-9 Degree of exposure of the portfolio
to climate-related opportunities
69. Delegated Regulation

Page no. 83
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statements
report
68
Disclosure
requirement
Description Datapoint Sustainable Finance Disclosures
Regulation
Pillar 3 reference Benchmark
Regulation
Climate Law Page /
materiality
ESRS E2-4 Amount of each pollutant listed in Annex II of the


soil
28. Indicator n. 8 Table I of Annex I,
Indicator n. 2 Table II of Annex I,
Indicator n. 1 Table II of Annex I,
Indicator n. 3 in Table II of Annex I
Not material
ESRS E3-1 Water and marine resources 9. Indicator n. 7 in Table II of Annex I Not material
ESRS E3-1 Dedicated policy 13.
Indicator n. 8 in Table II of Annex I
Not material
ESRS E3-1 Sustainable oceans and seas 14.
Indicator n. 12 in Table II of Annex I
Not material
ESRS E3-4 Total water recycled and reused 
Indicator n. 6.2 in Table II of Annex I
Not material
ESRS E3-4 Total water consumption in m3 per net revenue
on own operations
29.
Indicator n. 6.1 in Table II of Annex I
Not material
ESRS 2 - IRO 1 E4 
Indicator n. 7 in Table I of Annex I
Not material
ESRS 2 - IRO 1 E4 
Indicator n. 10 in Table II of Annex I
Not material
ESRS 2 - IRO 1 E4 
Indicator n. 14 in Table II of Annex I
Not material
ESRS E4-2 Sustainable land / agriculture practices or
policies

Indicator n. 11 in Table II of Annex I
Not material
ESRS E4-2 Sustainable oceans / seas practices or policies 
Indicator n. 12 in Table II of Annex I
Not material
ESRS E4-2 Policies to address deforestation 
Indicator n. 15 in Table II of Annex I
Not material
ESRS E5-5  39.
Indicator n. 9 in Table I of Annex I
Not material
ESRS 2 -
SBM3 - S1
Risk of incidents of forced labor 
Indicator n. 13 in Table III of Annex I
Not material
ESRS 2 -
SBM3 - S1
Risk of incidents of child labor 
Indicator n. 12 in Table III of Annex I
Not material
ESRS S1-1 Human rights policy commitments 20.
Indicator n. 9 in Table III and indicator
n. 11 in Table I of Annex I
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statements
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Disclosure
requirement
Description Datapoint Sustainable Finance Disclosures
Regulation
Pillar 3
reference
Benchmark Regulation Climate Law Page /
materiality
ESRS S1-1 Due diligence policies on issues addressed by the
fundamental International Labor Organisation
Conventions 1 to 8
21. 
2020/1816, Annex II
Page no. 85
ESRS S1-1 Processes and measures for preventing

22. Indicator n. 11 in Table III of Annex I Not material
ESRS S1-1 Workplace accident prevention policy or
management system
23.
Indicator n. 1 in Table III of Annex I
Page no. 86, 97
ESRS S1-3 Grievance/complaints handling mechanisms 
Indicator n. 5 in Table III of Annex I
Page no. 86
ESRS S1-14 Number of fatalities and number and rate of
work-related accidents

Indicator n. 2 in Table III of Annex I 
Annex II
Page no. 97
ESRS S1-14 Number of days lost to injuries, accidents,
fatalities or illness

Indicator n. 3 in Table III of Annex I
Page no. 97
ESRS S1-16 Unadjusted gender pay gap 
Indicator n. 12 in Table I of Annex I 
Annex II
Page no. 98
ESRS S1-16 Excessive CEO pay ratio 
Indicator n. 8 in Table III of Annex I
Page no. 98
ESRS S1-17 Incidents of discrimination 
Indicator n. 7 in Table III of Annex I
Page no. 98
ESRS S1-17 Non-respect of UNGPs on Business and Human
Rights principles and OECD guidelines

Indicator n. 10 in Table I and indicator
n. 14 in Table III of Annex I

2020/1816, Delegated Regulation


Page no. 98
ESRS 2 -
SBM3 - S2

the value chain

Indicator n. 12 and 13 in Table III of
Annex I
Not material
ESRS S2-1 Human rights policy commitments 17.
Indicator n. 9 in Table III and indicator
n. 11 in Table I of Annex I
Not material
ESRS S2-1 Policies related to value chain workers 18.
Indicator n. 11 and 4 in Table III of
Annex I
Not material
ESRS S2-1 Non-respect of UNGPs on Business and Human
Rights principles and OECD guidelines
19.
Indicator n. 10 in Table I of Annex I

2020/1816, Delegated Regulation


Not material
ESRS S2-1 Due diligence policies on issues addressed by the
fundamental International Labor Organisation
Conventions 1 to 8
19. 
2020/1816, Annex II
Not material
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Disclosure
requirement
Description Datapoint Sustainable Finance Disclosures
Regulation
Pillar 3
reference
Benchmark Regulation Climate Law Page /
materiality
ESRS S2-4 Human rights issues and incidents connected to
its upstream and downstream value chain
36. Indicator n. 14 in Table III of Annex I Not material
ESRS S3-1 Human rights policy commitments 16. Indicator n. 9 in Table III of Annex
I and indicator n. 11 in Table I of
Annex I
Not material
ESRS S3-1 Non-respect of UNGPs on Business and Human
Rights, ILO principles or and OECD guidelines
17.
Indicator n. 10 in Table I of Annex I 


Not material
ESRS S3-4 Human rights issues and incidents 36.
Indicator n. 14 in Table III of Annex I
Not material
ESRS S4-1 Policies related to consumers and end users 16.


Page no. 99
ESRS S4-1 Non-respect of UNGPs on Business and Human
Rights principles and OECD guidelines
17.
Indicator n. 10 in Table I of Annex I 


Not material
ESRS S4-4 Human rights issues and incidents 35.
Indicator n. 14 in Table III of Annex I
Not material
ESRS G1-1 United Nations Convention against Corruption 
Indicator n. 15 in Table III of Annex I
Page no. 103
ESRS G1-1 Protection of whistleblowers 
Indicator n. 6 in Table III of Annex I
Page no. 103
ESRS G1-4 Fines for violation of anti-corruption and anti-
bribery laws

Indicator n. 17 in Table III of Annex I
Commission Delegated Regulation

Page no. 107
ESRS G1-4 Standards of anti-corruption and anti-bribery 
Indicator n. 16 in Table III of Annex I
see MDR-P,
Page no. 35
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Environment
The chapter on the environment provides an overview of the
ENT Group’s approach to managing environmental aspects
of business, with a focus on compliance with the regulatory
requirements and the contribution to the sustainable
development goals. It consists of two main subchapters: The
key performance indicators according to the EU Taxonomy
that present the environmental sustainability of economic
activities; and ESRS E1 Climate change, which encompasses
the approach to climate change mitigation and adaptation,
calculation of GHG emissions and related measures.
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Key Performance Indicators in line with
the EU Taxonomy

the establishment of a framework to facilitate sustainable
investment, ENT Group reports on the proportion of turnover,

related to activities that are:
• taxonomy-eligible / non-eligible and
• aligned / not aligned with technical compliance criteria
in total consolidated turnover, capital expenditure and
operating expenses.
Regulatory framework and methodology
The EU Taxonomy represents a framework for identifying
economic activities that are considered environmentally

contribution to at least one environmental goal, does not

with the prescribed minimum safeguards.
The activity assessment was carried out in accordance

2021/2139, 2021/2178, 2023/2486 and the changes introduced by

introduce the principle of proportionality, the materiality

application of the EU Taxonomy.
Approach
The following criteria were applied in the assessment of the
activities:
• that the activities meet our own criteria of economic
activity in that they generate or will generate revenue
• that they correspond to the descriptions from Annex I

 
The assessment included:
 
in the relevant delegated acts;
• preliminary analysis of technical criteria for substantial

 

• review of the implementation of minimum safeguards

Based on these procedures, it was determined that the Group

terms of turnover, capital and operating expenditure.
Changes in disclosures compared to the previous
reporting period
In the reporting period for 2025, a change was introduced
in the methodological approach to the application of the EU
Taxonomy compared to the previous year. In accordance
with the amendments introduced by Delegated Regulation

in the taxonomy, economic activities that individually and
collectively account to no more than 10% of turnover, CapEx
or OpEx are not disclosed as separate items. In addition, non-



their business model. For the Group, operating expenses are

based on employees and their competencies, rather than on
assets, buildings or their maintenance, which makes them less
important and useful for making decisions on the assessment
of sustainability. Consequently, operating expenses related to
assets constitute a negligible share of total costs. Therefore,
OpEx, within the meaning of Article 8 and in accordance with

immaterial for taxonomy reporting purposes.
Accounting categories and policies
Material turnover, CapEx and OpEx related to taxonomy-eligible
activities are the basis for calculating their proportion in the
overall indicators. The proportion of eligible turnover, CapEx
and OpEx is calculated solely on the basis of the material
amounts allocated to the product codes related to the
taxonomy-eligible activities.
Tangible expenditures that are not related to revenue-

eligible CapEx or OpEx provided that the activity exists in a
Delegated Regulation on climate or the environment and that
the supplier’s activity is taxonomy-eligible.
Turnover
For registered activities, turnover includes sales revenue
from products and sales revenue from services. The revenue
presented corresponds to the revenue presented in Note 5

Capital expenditures (CapEx)
The following is included: items of property, plant and
equipment, costs of replacing parts of certain items at the
time of their occurrence that are expected to generate future

and equipment”, Note 13 “Intangible assets” and Note 28 “Leases”

Operating expenses (OpEx)
The following is included: direct expenses of projects and
expenses that refer to research and development, measures
of operating maintenance of buildings, short-term lease,
maintenance and repair and all other direct expenses that
refer to everyday maintenance of property, plant and



In accordance with the EU Taxonomy policy, OpEx includes

expenses from the accounting statements. They are calculated

statements.
Double counting is avoided by preparing data at a consolidated

classifying data by categories in such a way that one piece of

categories can be counted as aligned, not aligned, or not eligible
activities.
Taxonomy-eligible activities

Nikola Tesla required the interpretation of taxonomy and
related Delegated Regulations. It should be noted that only a
few activities in the ICT sector are included in the Delegated

taxonomy calculation.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
73
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
73

CODE ACTIVITY NAME
 Computer programming, consultancy and related activities
 Data processing, hosting and related activities
 Transport by motorbikes, passenger cars and light commercial vehicles
 Renovation of existing buildings
 
 Acquisition and ownership of buildings
Assessment of activities according to the
criteria of eligibility and alignment
Turnover
Eligible turnover relates to the activity Computer


and related services are included, and items of equipment

excluded, including part of own products that are not software,

product characteristics of such equipment, such as durability,
reusability or recyclability.


Operating expenses (OpEx)

• maintenance and repair;
• daily management of real estate and equipment.
In accordance with the principles introduced by Delegated

threshold and does not publish KPIs for operating expenses
since OpEx:
 
• makes a negligible proportion in the overall expenditure
structure;
• is not key for making decisions on sustainability, because
the business model is based primarily on the knowledge and
competencies of employees, not on assets.
Capital expenditures (CapEx)
The following expenditures related to taxonomy-eligible

expenditures:
 

• investment in LED lighting;
• roof replacement and thermal insulation;
• vehicle leasing;
 
• investment in data center equipment.
The proportion of taxonomy-eligible capital expenditures


Taxonomy alignment assessment
Even though several activities meet the eligibility criteria, not

2025 due to:
 
not being conducted;
 
according to DNSH requirements;
 
procedures in the value chain.
In addition, since assessing alignment for CapEx and OpEx
requires detailed information on the taxonomy alignment of the
suppliers themselves, it is currently not possible to determine

and OpEx can also be considered to be aligned according to
taxonomy.
DNSH (Do No Signicant Harm)


environmental objectives of the EU Taxonomy.
Minimum safeguards (MSS)

partially met, based on policies and procedures covering: labor
rights, occupational safety and health, business ethics and

the minimum safeguards are considered to be in place.
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Template I: Proportion of turnover, CapEx, OpEx from products or services associated with Taxonomy-eligible or Taxonomyaligned economic activities – disclosure covering year (N)
(summary KPIs)
Financial

2025
 
“Propotion
of Taxonomy
eligible
activities

“Taxonomy
aligned
activities

“Proportion
of Taxonomy
aligned

Breakdown by enviromental objectives of Taxonomy aligned activities
“Proportion of
enabling
activities

“Proportion
of
transitional
activities

“Not
assessed
activities
considered
non-material

“Taxonomy
aligned
activities
in previous



“Proportion
of Taxonomy
aligned
activities
in previous



Climate
Change
Mitigation

Climate
Change
Adaptation

Water

Circular
Economy

 Biodiversity

Text € % € % % % % % % % % % % currency %
Turnover 238,589,896 € 76.00% - € 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 20.92% 0 0.00%
CapEx
4,298,163 € 99.36% - € 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.64% 0 0.00%
OpEx
2,166,034 €
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Template II: Proportion of turnover from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering year (N) (activity
breakdown)
 Turnover
 2025
Economic Activities


Taxonomy
eligible KPI

of Taxonomy
eligible

Taxonomy
aligned KPI

value of

Taxonomy
aligned KPI

Taxonomy
aligned

Environmental objective of Taxonomy aligned activities
Enabling
activity

Transitional
activity

Proportion of
Taxonomy
aligned in
Taxonomy

Climate
Change

Climate
Change
Adaptation

Water

Circular
Economy


Biodiversity

text % Mil. € % % % % % % %




%
Computer
programming,
consultancy and
related activities
CCA 8.2 76.00% - € 0.00% 0.00% 0.00%
Sum of alignment per objective 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
 76.00% - € 0.00% 0.00%
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Template II: Proportion of CapEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering year (N) (activity
breakdown)
 CapEx
 2025
 
Taxonomy
eligible KPI

of Taxonomy
eligible

Taxonomy
aligned KPI

value of

Taxonomy
aligned KPI

Taxonomy
aligned

Environmental objective of Taxonomy aligned activities
Enabling
activity

Transitional
activity

Proportion of
Taxonomy
aligned in
Taxonomy

Climate
Change

Climate
Change
Adaptation

Water

Circular
Economy


Biodiversity

Text % Mil. € % % % % % % %




%
Data processing, hosting and
related
activities
CCM 8.1 0.70% - € 0.00% 0.00% 0.00%
Computer programming,
consultancy and
related activities
CCA 8.2 45.69% - € 0.00% 0.00% 0.00%
Installation, maintenance and
repair of

CCM 7.3 21.95% - € 0.00% 0.00% 0.00%
Acquisition and ownership of
buildings
7.7 4.98% - € 0.00% 0.00% 0.00%
Transport by motorbikes,
passenger cars and light
commercial vehicles
6.5 26.04% - € 0.00% 0.00% 0.00%
Sum of alignment per objective 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
 99.36% - € 0.00% 0.00% 0.00%
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E1-1 – Transition plan for climate change
mitigation
At the reporting date, the ENT Group does not have a formally
adopted transition plan for climate change mitigation in terms of the
requirements for the publication of ESRS E1-1. During the reporting
period, key bases for its preparation and future adoption have been
developed. Relevant elements of these bases were published through
the related requirements ESRS 2 SBM-3, ESRS 2 IRO-1 and ESRS E1-2 to
E1-6. Such an approach has enabled the establishment of an analytical
and methodological basis for the future transition plan, but the plan
has not yet been formally consolidated and approved by the highest
governing bodies. ENT Group intends to proceed with the formal
completion and consideration of adoption of the transition plan
during 2027, after establishing necessary management, operational

E1-2 – Policies related to climate change
mitigation and adaptation
In 2026, ENT Group will adopt a separate Climate Change Mitigation
and Adaptation Policy, which will implement the plan announced in
the previous reporting period. The Policy is separated from the


targets, and responsibilities and resources required for
implementation in the area of climate change. It applies to all legal
entities of ENT Group and to all business segments: Telco, Digital
Society, Development, Research and Services. It is based on the Paris
Agreement, the GHG Protocol, the Science Based Targets initiative
framework, an integrated environmental management system
according to the ISO 14001 standard and relevant recommendations
of the International Telecommunication Union for the assessment
of emissions of ICT solutions. The Policy covers the management
and monitoring of greenhouse gas emissions in own operations and
in the upstream and downstream value chain to the extent that


and transitional climate risks and strengthening the resilience

responsibility for the implementation of the Policy lies with the ENT
Group Management Board, which approves the Policy, oversees
its implementation and monitors progress, while the Sustainability
Steering Committee directs implementation at the strategic level,
and the Implementation Committee for Sustainability coordinates
operational implementation, including the annual greenhouse gas
emissions inventory and compliance with disclosures. The Policy will
be publicly available on the ENT Group website.
E1-3 – Actions and resources in relation to
climate change policies

LED lighting in the Administrative building, which is being implemented



In the second phase, implemented in 2025, the lighting was replaced


will be replaced with DALI support for smart control, with a total

A 1,244 kWp photovoltaic power plant has been built for the Zagreb

second quarter of 2026. The expected annual production is 1.2 GWh of



assets in 2025 related to the construction of a solar power plant

the ENT Group as part of capital investments. The implementation
includes the procurement of a software tool for management and
monitoring and a maintenance contract with the contractor.
Considered measures to mitigate emissions and adapt to
climate change
Based on carbon footprint analysis, climate risk assessment and
ESRS E1 Climate change
Table of contents
Management
report
Sustainability
report
Financial
statements
report
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Table of contents
Managament
report
Sustainability
report
Financial
statements
report
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
Group considered possible measures to reduce emissions and adapt
to climate change in the short and medium term.



conventional vehicles with hybrid models and the establishment of
charging infrastructure at ENT Group locations. In addition to the
above, the possibility of developing a digital platform for mobility
management and the analysis of the feasibility of installing battery
energy systems were also considered.
In relation to Scope 2, the possibilities of negotiations with lessors
of business premises on the transition to green energy, the analysis
of the feasibility of installing heat pumps and the introduction of an
energy management system according to the ISO 50001 standard
were considered. At the Zagreb location, among the possibilities
considered were the completion of energy renovation and the

monitoring and control system, and the installation of temperature,

consumption.
In relation to Scope 3, the possibilities of establishing a multi-year
supplier engagement program in accordance with the guidelines of
the Science Based Targets initiative Supplier Engagement Guidance,
the introduction of green procurement criteria for IT equipment
with an emphasis on longer service life and a lower emission
factor, and measures to reduce emissions from employee mobility,
including the development of bicycle infrastructure, car-pooling
programs and encouraging work from home, were considered. ENT
Group also considered the possibility of creating a methodological
framework for assessing and quantifying the impact of sold

state, assessment limits, applying consistent emission factors and

E1-4 – Targets related to climate change
mitigation and adaptation

emissions for the period 2024-2030. in accordance with the Science

Near-Term Tool, version 2.4.1, and the trajectory to limit global

2024.
The targets are calculated using the absolute contraction approach


compared to the base year. The calculation is based on the location
method.
Scientic foundation and methodology: The targets are

1.5°C, derived using the SBTi Corporate Near-Term Tool v2.4.1. The

sector was not available in the used tool at the time of calculation.
Instead, a cross-sectoral Absolute Contraction Approach was
applied. The baseline climate scenario is compatible with the IPCC



independent of the regulatory scenario. The targets are not

not planned in the short term.
Key assumptions and future trends: The absolute contraction
approach requires emissions to be reduced in absolute terms
regardless of changes in business volume. Growth in revenue or
activity is not taken as a mitigating factor in the calculation of
the target. The following trends were considered as part of the


Scope 3 emissions, particularly through the procurement and travel
categories, reinforcing the need for parallel implementation of


solutions are relevant for the development of a methodology for





sources are relevant for the implementation of measures in Scope 1
and 2, while the availability of primary emission data from suppliers in

Representativeness of the baseline value: 




year average was applied because the impact of temperature
or other external irregularities that would materially distort the


reporting framework.
Stakeholder engagement, changes and monitoring of targets:
Stakeholders were not involved in the target setting process; the

changes to the targets, measurement methodologies or underlying

year of target setting. Progress towards the targets is monitored
annually through the GHG inventory, with absolute emissions per

indicators.
E1-5 – Energy consumption and mix
ENT Group’s energy consumption data for 2025 includes electricity
and thermal energy from Scope 2, as well as natural gas and
fuel for vehicles listed in Scope 1. For the conversion of fuels into





In 2025, ENT Group consumed a total of 5,811.98 MWh of electricity.
Thermal energy from heating plants in Zagreb and Osijek amounts
to 3,657.65 MWh. The share of fossil energy sources in total energy
consumption amounts to 52.77%, nuclear energy sources represent
0.76%, and renewable energy sources 46.47%.
Revised 2024 benchmark
In 2024, emissions from the vehicle fuel category were calculated
based on data from fuel purchase cards. As of 2025, an improved


entities. The 2024 benchmark has been revised in accordance with
the ESRS to ensure comparability with the new methodology. All

Scope  2030 Reduction
Scope 1 459.08 tCO
2
e 266,27 tCO
2
e -42%
Scope 2

707.58 tCO
2
e 410.40 tCO
2
e -42%
Scope 3 25,781.57 tCO
2
e 14,953.31 tCO
2
e -42%
Note: Targets are based on the revised GHG inventory for 2024,

the extended scope of Scope 3.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
79
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
79
Energy consumption and mix
Comparative
for 2024

Revised for
2024
2025
   
 685,00 1,962.04 2,223.63
 120,00 120.00 159.29
 157,67 157,67 94.50


2.679,00 2.679,00 3,657.65
(6) Total non-renewable energy consumption (MWh) (calculated as the sum
of lines 1 to 5)
3,641.67 4,918.71 6,135.07
 37.31 % 44.56 % 52,77 %
 113.87 113.87 88.20
 1.17 % 1.03 % 0.76 %

industrial and municipal waste of biological origin, biogas, hydrogen from

  


6,005.88 6,005.88 5,402.50
   
(11) Total renewable energy consumption (MWh) (calculated as the sum of
lines 8 to 10
6,005.88 6,005.88 5,402.50
 61.53 % 54.41 % 46.47 %
Total energy consumption (MWh) (calculated as the sum of lines 6 and 11) 9,761.43 11,038.46 11,625.76
 271.55 271.55 226.79
Energy consumption and mix in ENT Group
remain unchanged from the originally published 2024 values. In accordance with
the ESRS requirements for documenting methodology changes, which require
the publication of both old and new values when changing the measurement
methodology, the original vehicle fuel consumption values for 2024 are listed
in the Energy consumption and mix in the ENT Group table, together with the
revised values and values for 2025.
Combination of energy sources in 2025
To present the combination of electricity sources, the structure of the
share of individual sources was used, as supplied by HEP Opskrba according
to the available data for the year 2025. HEP, as a sustainability reporting entity


Report for 2025 has not yet been published at the time of writing this report,
data on the structure of the energy mix published by HEP Opskrba for 2025

upcoming sustainability report.

electricity is treated as renewable if the origin is clearly established by the





an amount for which the origin cannot be determined.


unlike the original data for 2024, which was based on partial data from INA
cards. Electricity, thermal energy and natural gas are unchanged compared to
the original report for 2024.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
80
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
80
E1-6 – Gross Scopes 1, 2, 3 and Total GHG
emissions
In the calculation of greenhouse gas, ENT Group applies the GHG
Protocol using an operational control approach. The calculation
includes the parent company Ericsson Nikola Tesla d.d. and its
subsidiaries and branches: Ericsson Nikola Tesla Servisi d.o.o.,


ENT Group’s operations include the calculation of CO, NO and
CH emissions in all Scope 1, 2 and 3 categories. Fluorinated gas
, NF
business processes. Relevant emission factors from national



= 29.8;
N
For the purposes of comparability with 2025, data for 2024



comparison of long-term trends is 2017, while the base year for SBTi
targets is the revised 2024.
Scope 1
Scope 1 emissions include direct emissions from energy sources
under the operational control of the ENT Group: fuel consumption

preparation and fugitive emissions of refrigerants. In 2025, total
Scope 1 emissions amount to 489.02 tCO, which represents an


in the calculation scope and increased annual mileage. Compared to

larger, but is explained solely by the change in methodology, i.e. the
transition from calculation based on fuel card data for part of the


emissions have been reduced by 65% due to lower refrigerant
losses.
Scope 2
Indirect Scope 2 emissions include emissions from purchased
electricity and thermal energy at all locations of the ENT Group.


average network or supply emission factors.
Total Scope 2 emissions according to the location approach in 2025
amount to 1.652,44 tCO, which is an increase of 8.20% compared to

consumption at the Zagreb location, and partly due to changes
in heat emission factors. Electricity emissions according to the
location approach decreased by 8.3% due to lower total electricity
consumption.
According to the market approach, Scope 2 emissions amount to
891.23 tCO, which represents an increase of 25.95% compared to the

Scope 3
Scope 3 emissions include indirect emissions in the upstream and
downstream parts of ENT Group’s value chain. The total emissions
of Scope 3 in 2025 amount to 21,705.24 tCO. Compared to the revised

Scope 3 continues to make up the dominant share of ENT Group’s
total emissions. The revised data for 2024 and the data for 2025 are


application of monetary emission factors to all purchased goods

of mobile sources, improved coverage of employee trips for all
Group entities and more detailed collection of data on upstream
transport.
 and
continue to make up by far the largest share of Scope 3, with a

,





increase in vehicle fuel consumption.
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Overview of the share of emissions calculated based on the
use of primary data from suppliers in Scope 3
The proportion of emissions with primary supplier data was
calculated as the proportion of emissions based on data directly
provided by the supplier and the total emissions in the respective

proportion of ~16 % refers to emissions associated with equipment
and solutions purchased from Ericsson AB, which provided data on
the embedded emissions of its products; the remaining portion was
calculated using a monetary-based method based on procurement

refers to emissions from air travel for which emission data
provided by the airline were used; the remaining portion was
calculated using the distance-based method.
Scope 3 categories Calculation method / reason for exclusion Proportion of emissions with primary
supplier
Purchased goods and services

supplier data
~16 %*
Capital goods  0 %
Fuel and energy-related activities


from the Croatian database of emission factors not collected directly from
energy suppliers
0 %
Upstream transport and
distribution
Distance-based method 0 %
Waste generated in operations  0 %
Business travel Distance-based method 76 %*
Employee commuting  0 %
Upstream leased assets ENT has no leased assets 
Downstream transportation and
distribution
ENT has no outbound transport emissions in 2025 
Processing of sold products ENT has no material products to process 
End-of-life treatment of sold
products
ENT does not sell physical products that have an end of life cycle 
Downstream leased assets ENT does not lease assets to third parties 
Franchises ENT does not operate through franchises 
Investment  
Overview of the share of emissions calculated based on
the use of primary data from suppliers in Scope 3
* For the purchased goods and services category, a certain proportion of emissions is associated with goods purchased from
Ericsson AB, which provided data on the embedded emissions of its products. For the business travel category, a certain
proportion of emissions is derived from airline emissions data.
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The total greenhouse gas emissions of the ENT Group by scope and category
are shown in the table below.
Scope and category 2025
2024
(revised)
2025 / 2024
Scope Emission category
Emisija
(tCO
2
)
tCO
2
e tCO
2
e %
Scope 1 1-1 Stationary energy sources 32.20 24.40 +31.97 %
1-2 Mobile energy sources 443.28  +12.04 %
1-3 Process emissions   
1-4 Fugitive emissions 13.54 39.03 
TOTAL Scope 1 489.02 459.08 +6.52 %
Scope 2  875.21 954.10 
 113.99 134.48 
2-2 Consumption of energy for heating and cooling 777.24 573.10 +35.62 %
TOTAL Scope 2 (location-based) 1,652.44 1,527.20 8.20 %
TOTAL Scope 2 (market-based) 891.23 707.58 25.95 %
TOTAL Scope 1 and 2 (location-based) 2,141.46 1,986.28 7.81 %
TOTAL Scope 1 and 2 (market-based) 1,380.25 1,166.67 18.31 %
Scope 3 3-1 Purchased goods and services 18,806.24 23,087.27 
3-2 Capital goods 204.85 481.33 
3-3 Fuel- and energy-related activities not included in
Scope 1 or 2
426.80 286.10 +49.18 %
3-4 Upstream transportation and distribution 84.55 169.48 -50.11 %
3-5 Waste generated in operations 57.52 37.21 + 54.59 %
3-6 Business travel 537.43 275.70 +94.93 %
3-7 Employee commuting 1,587.85 1,435.75 +10.59 %
   
3-9 Downstream transport and distribution  8.73 
3-10 Processing of sold products   
3-11 Use of sold products   
3-12 End-of-life treatment of sold products   
   
3-14 Franchises   
3-15 Investment   
TOTAL Scope 3 21,705.24 25,781.57 –15.81 %
TOTAL Scope 1, 2 and 3 (location-based) 23,846.70 27,767.85 –14.51 %
TOTAL Scope 1, 2 and 3 (market-based) 23,085.49 26,948.24 –14.33 %
GHG intensity based on net revenue
The intensity of greenhouse gas emissions per net revenue for
2025 is shown in the table below. The table shows the intensity

and 2025. Total sales revenue of the ENT Group in 2025 amounted
to EUR 238.59 million, which is 4.36% less than the previous year.
The emission intensity per net revenue for 2025 according to
the location method is 99.95 tCO/million EUR, which is a decrease

The decrease in intensity is the result of a decrease in total
Scope 3 emissions that was proportionally larger than the
decrease in revenue.
Note: The comparative data for 2024 (revised) do not
correspond to the values from the previous annual report
(25.42/23.55 tCO2/million EUR) due to a retroactive change in the
GHG inventory that expanded the scope of Scope 3. The values
are methodologically comparable within this report.
E1-7 – GHG removals and GHG mitigation
projects nanced through carbon credits

or emission mitigation projects through the purchase of
carbon credits. Accordingly, no deduction resulting from
carbon credits or compensation instruments has been applied
in the presented emissions data.
E1-8 – Internal carbon pricing
ENT Group currently does not have an internal carbon
pricing mechanism in place. The assessment of climate and


internal price of emissions.
GHG intensity based on net
revenue


2

2025

2

Total GHG emissions

revenue
111.31 99.95
Total GHG emissions

revenue
109.44 96.76
Data for 2024

revised inventory
using a consistent
WLTP methodology
for vehicles and an
expanded scope for
Scope 3. Original
published data
for 2024: Scope 1 =
246.44 tCO; Scope 3
= 4,569.40 tCO; Total
.
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E1-9 – Anticipated nancial eects from
material physical and transition risks and
potential climate-related opportunities
ENT Group applies the option to publish only qualitative

risks and potential climate opportunities, in accordance with

of reporting. Quantitative assessments are planned to be
introduced in the next reporting cycles.
Analysis of physical climate risks has been conducted for all

primarily an increase in average temperatures, and acute


business model, which is not based on physically intensive
assets, these risks are assessed as manageable levels.

potential market, reputational and contractual pressures
arising from the lack of evidence of the environmental
basis of downstream ICT solutions. In the context of the EU
Taxonomy, ENT Group currently does not quantify emissions


measurable impact of the solution on emissions reduction.

Group develops and delivers ICT solutions that support

customers, including IoT platforms for monitoring and



chain for the impact of these solutions on emissions reduction,
thereby strengthening its market position and creating the
prerequisites for taxonomy alignment of the two activities
from Annex 1 of the EU Taxonomy 8.2. Data-driven solutions for
GHG emissions reductions and 8.4 Management software and
adaptation to physical climate risks.
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Social
Attracting, developing and retaining employees

talents is key to maintaining Ericsson Nikola Tesla Group’s
competitiveness in business areas: Telco, Digital Society,

technology leadership, employee competencies represent one
of the key competitive advantages, due to which ENT Group has
been continuously investing in hiring and developing employees,
as well as their satisfaction and engagement.
Human resources management is focused on opening new job
positions, ensuring quality working conditions and work-life

culture. Priorities include securing an adequate number of
expert employees in order to carry out business activities
and reducing the key talents turnover rate, thus maintaining
the continuity of competencies necessary for innovations and
market competitiveness.
Although ENT Group currently has enough experts, growing

- which is characteristic for ICT industry - represents a
challenge. As the largest ICT employer in Croatia, ENT Group
has a strong knowledge base, but also the obligation to
continuously adjust to needs and expectations of employees
and labor market trends.


jobs and the need for new competencies. Therefore, it is
crucial to ensure the continuous upskilling of employees so
that they remain employable and competitive in the long term.
Additionally, AI technologies also bring numerous opportunities,

processes, which positively impacts employee engagement.
Strategy’s impact on the workforce

a stable situation when it comes to the adequate number
of competent employees, as well as their engagement and
satisfaction, and no negative impacts on the workforce have
been recorded. In exceptional circumstances, e.g. when working
on complex projects with short delivery deadlines or while
securing continuous customer support, there may be a need
for overtime work or on-call duties outside of regular working
hours. Such work is always compensated and fully compliant
with the national laws, Collective Agreement and internal
rulebooks.
Positive impacts of employee development are particularly

through access to state-of-the-art technologies, including the
advanced communication networks and ICT solutions for digital
transformation. Thereby conditions are ensured for employee
professional development in an innovative environment,
motivation and engagement are strengthened, while at the
same time ENT Group’s competitive position in the market is
additionally strengthened.
Employee development and work environment
With the aim to secure a broad availability of educational
resources and a systematic approach to their procurement
and distribution, ENT Group has Enter Academy. All activities
related to training, education, and the growth and development
of our employees’ skills are carried out through joint



overview of all the performed activities. The introduction of


employee was assigned an electronic training record, which

professional CV.
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ESRS S1 Own workforce
S1-1– Policies related to own workforce
ENT Group applies the UN Guiding Principles on Business and

clear policies that ensure a fair, safe, and inclusive work
environment. The Code of Business Ethics is based on these
principles, and is applied within the companies within Ericsson
Nikola Tesla Group, and Croatian and English versions of this
Code are available on the company’s web page.
Code of Business Ethics includes clear mechanisms of
protection from discrimination on all grounds. Child labor,

prohibited. Any type of discrimination based on race or
ethnicity, skin color, gender, language, religion, political or other
belief, national or social origin, property status, membership
in a trade union, education, social position, marital or family
status, age, health condition, disability, genetic heritage,
gender identity, expression or sexual orientation is prohibited.
All work activities are carried out on a voluntary basis, and
additionally during the hiring process, the age of the candidate

legislation.
All employees and students of ENT Group must read the Code,
sign a statement of acceptance and adhere to the Code in their
everyday work. Within the internal framework that governs
human rights protection, the following additionally applies:
Rulebook on the Peaceful Resolution of Labor Disputes, and
Rulebook on Procedures and Protection of Employee’s Dignity.
Detailed description of the mechanisms for reporting and
resolving complaints is provided in chapter S1-3.
In cooperation with Legal, changes in legislation are regularly
monitored to ensure full compliance with the applicable laws,
international standards and best practices in the industry.
Such a responsible and adaptable approach continuously
improves fair, safe, and inclusive working conditions. This not
only supports the company’s long-term sustainability, but also
strengthens its competitiveness in the ICT sector, by creating
a supportive working environment that successfully responds
to challenges and demands of today’s business environment.
Occupational Health and Safety
OHS Management is conducted using a framework which
is fully aligned with the national laws, internal acts and
the requirements of international standard ISO 45001.
The application of this standard allows structured risk
management, continuous improvements of the process as well

levels.

risks are key elements of this approach, with the aim to reduce
the number of potential accidents and ensuring a safe and
healthy working environment. Occupational Health and Safety
system encompasses proactive measures of prevention,
regular training for employees, safety checks and application
of best practice in ICT industry. Such approach contributes
to the overall business sustainability, strengthens the

of employees remain one of the company’s strategic priorities.
Detailed information about OHS management can be found in
chapter S1-14.
Supporting an inclusive and exible working environment
ENT ensures the adaptation of workplaces and the working
environment to provide equal working conditions and
opportunities for professional development to employees with
disabilities, pursuant to the Rulebook on Determining Quota for
Hiring Persons with Disabilities. The Policy on Working Remotely
allows employees with disabilities to work permanently from

life balance. Additionally, the Parking Policy grants priority in
parking space allocation to employees with disabilities.
With the aim to strengthen inclusiveness, fair and transparent
recruitment and promotion processes are applied; support
is provided to foreign employees during onboarding and in
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handling administrative documentation, along with mentoring
and advisory assistance.
Continuous improvement of workforce protection
policies
Policies focused at protecting human rights and working
conditions have not been amended in 2025, and their
implementation continues to be monitored and improved.
Considering employee satisfaction with working conditions,
the company Ericsson Nikola Tesla Servisi d.o.o. has additionally
adopted the Policy on Working Remotely, further strengthening

needs of employees.
Managing impacts, risks and opportunities
S1-2 – Processes for engaging with own
workers and workers’ representatives
about impacts
Dialog and cooperation with employees and social
partner
At Ericsson Nikola Tesla, employees’ rights and interests are
represented by 13 union representatives, who also serve as
the Workers Council. The Collective Agreement and its annexes
represent a key document that governs employment relations,
compensation, social rights and obligations of the employer and

mechanisms for informing, consulting, and involving employees,
enabling the company to systematically gain insight into the
views, needs, and priorities of its workforce.
The Employee Union is the company’s key social partner, and
the company regularly has a structured dialog with them
during meetings, consulting and counseling, in line with the
Labor Act. The union’s views are considered when creating
internal policies and acts, including those on working conditions,

Annual negotiations about the Agreement about Salary Policy
and Other Payments include Human Resources Director and
the negotiating committee, and address the issues related to
material and social security, working conditions, job security
and professional development.
Employees are informed through the intranet, e-bulletin
boards, email, and direct communication with the managers.
Special attention is given to vulnerable groups, such as
employees with disabilities, who receive continuous support
from the Human Resources Unit through information
sharing and individual counseling about their rights, help in

the competent institutions to ensure the exercise of statutory
and other rights.
The internal policy on allocating parking for employees with
disabilities allows priority access to parking space, including
the provision of specially designated spaces in order to
facilitate their daily access to the workplace.
Employee development, engagement and satisfaction are
monitored through annual performance and career talks, as

S1-3 – Processes to remediate negative
impacts and channels for own workers to
raise concerns
Open communication and irregularities reporting system
ENT Group fosters transparency and encourages employees to

for discrimination or any other form of unethical behavior. All

Anti-corruption & Fair Market Competition”, which strengthens
the culture of integrity and ethical behavior.

or a senior manager about the observed irregularities, unless
the manager is directly related to the circumstances. In
such cases, they can report it directly to the Compliance and
Investigation Service, or through other channels, anonymously
or non-anonymously.
Detailed information on anonymous and non-anonymous
channels is available on the web site Company governance
- Ericsson Nikola Tesla d.d.. Employees, suppliers and other
stakeholders can submit reports, whereby all the reports are
handled in line with the established internal procedures. For
additional discretion, there are incident reporting boxes for
anonymous reporting placed on locations, thus securing the

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
statistical analysis of all the reports that were received from


been recorded through parameters such as the type of the
report, geographic area, processing time and the possibility
for feedback communication with the person reporting.
Feedback is provided when the person reporting leaves contact
information. In cases when the report was made anonymously,
for example via email or box, without the possibility of further
communication, feedback is not possible.
Employees can express their trust in the system also in
annual anonymous survey Voice, in which they evaluate the
satisfaction of the available reporting channels, the possibility
of communication, and the overall ethics in doing business.
Settlement of individual labor disputes
With the aim to secure impartial and fair dispute resolution,
ENT Group adopted a Rulebook on Peaceful Resolution of
Individual Labor Disputes. The Rulebook determines the way of
receiving and handling employee complaints, while mediators
and Reconciliation Board are appointed to implement the
procedure.
Reconciliation Board is responsible for the analysis,
investigation and decision making regarding the measures
taken, thus ensuring an objective resolution. The Rulebook

favorable for the employee than the decision for which the
employee submitted the request, which additionally guarantees
fairness of the overall process.
Rulebook on Procedures and Protection of Employee’s
Dignity
The Rulebook on Procedures and Protection of Employee’s

dignity. The complaints are reviewed by the Committee for
Receiving and Resolving Complaints, which acts within eight
days from the date it receives the complaint. This Rulebook
includes protection against discrimination, sexual harassment,

which are not acceptable in the workplace.

Committee proposes to the employer to take the appropriate
labor-legal action, with the aim to protect the employee and
prevent recurrence of such situations.
Corrective or disciplinary measures

corrective or disciplinary measures after the Compliance

violation. The aim is to ensure transparent and consistent
procedures, taking into account all the relevant circumstances,
thus strengthening the compliance culture.
ENT Group applies internal acts that regulate reporting
irregularities and investigation procedures, including the
Internal Reporting Procedure, and the Investigation Handling
document, securing a systematic, objective and an integrity-
based process. Detailed information can be found in chapter

Mechanisms to protect employee dignity and secure
work environment without discrimination
Ericsson Nikola Tesla Group consistently applies policies
and mechanisms to protect human and labor rights, and
encourages work environment where employees can feel safe,
respected and equal. Special attention is given to preventing
discrimination, harassment and sexual harassment, with clearly

The Rulebook on Procedures and Protection of Employee’s

discrimination, harassment and sexual harassment. The
complaints are received and reviewed by specially appointed


Protection mechanisms include:
• active measures against abuse and harassment, while
ensuring the protection of the complainant
• transparent policies of awarding and securing equal
opportunities for professional development
• work-life balance
• open communication and employee participation
The hiring process is based on objective criteria and equal
opportunities for all candidates, including persons with
disabilities, to whom working conditions are adapted in
accordance with the relevant legislation.
Ways to report irregularities
Various channels for reporting irregularities related to human
and work-related rights are available at ENT Group. Employees
can submit a report through Committee for Receiving and
Resolving Complaints Related to the Protection of Employees’
Dignity, which acts in line with the Labor Act and internal
rulebooks, by using incident reporting boxes at locations in
Zagreb, Split and Osijek. External stakeholders can report
suspicions regarding human rights violations via compliance

system.
S1-4 – Taking action on material impacts
on own workforce, and approaches to
mitigating material risks and pursuing
material opportunities related to own
workforce, and eectiveness of those
actions
Managing material impacts on employees
ENT Group fosters a work environment where every individual
feels welcomed, respected, and included. In order to ensure

material impacts, systematic measures are applied to prevent,
solve challenges and create a stimulating work environment.
The key risks related to our own workforce have been

assessment, which determined our material impacts, risks, and

• The departure of employees with key competencies and


• Employee skills not keeping pace with rapid development
and application of new technologies, which may limit the

advancements and meets its strategic targets.
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Sustainability
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Table of contents
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Sustainability
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
internal data and processes:
Monitoring employee turnover, including the analysis of the
employee attrition rate, especially among employees with key
competencies and high potential.
Ongoing partnership discussions with the management of
resource units and strategic departments, especially Human


employees with key competencies, high potential and high risk

In order for these risks to be kept under control, ENT Group
carries out measures focused on key employee retention,
succession planning and continuous development of knowledge
and skills in line with technological and market changes.
Additional information about the characteristics of the
employees and employee turnover can be found in chapter S1-
6. The company includes key employees in strategic educational
programs to further develop their skills, as well as in the
strategic initiatives that are important for the company.
In order for the employees to remain competitive amid
rapid technological development, educational programs are
created for larger groups of employees. More about employee
education and development can be found in chapter S1-13. The
Voice survey showed that 74% of employees stated that they
have good opportunities for learning and growth both in terms
of knowledge and professional responsibilities.
Encouraging positive changes and preventing potential
negative impacts
In Ericsson Nikola Tesla Group, employees’ well-being
represents one of the key areas of human resources


of measures is something that we have been monitoring

The anonymous survey Voice and the comments employees
provide through internal surveys show us what works and
where additional improvements are needed. In an anonymous
Voice survey, in response to the question related to employee
well-being, 88% of employees replied that they believe the
company takes care of employees’ health and well-being. Based
on these insights, during 2025, mammography was introduced
to the medical checkup package for women, which is a concrete

With the aim to ensure employee long-term well-being and
reduce risks, ENT Group implements measures focused on
preventing and creating an encouraging work environment.
Special attention is dedicated to mental and physical health.
Employees are supported in managing stress and maintaining

PrevENTion program. Care for health is further strengthened
through preventive medical examinations, including medical
checkups, which contribute to a sense of security, well-being,
and quality of life.

Overtime work may occur occasionally during the delivery of
projects with short deadlines or maintenance activities. In

can work remotely up to ten days each month, or work

facilitates collaboration to employees who work in international
teams, where they are daily aligned with colleagues in other



during periods that are important for family life.
Managing material impacts also requires the corresponding
internal resources, and in the ENT Group this process includes
expert units, such as Legal, Human Resources, Marketing and
Sourcing. Human Resources is responsible for the development
and implementation of policies that shape the workforce.
Manager Total Rewards & People Analytics is responsible for
developing, updating, and monitoring policies related to rewards
and analytics, while the Manager HR Operations is responsible
for the implementation of these policies. The Human Resources
Talent and Program Manager and People Experience Specialist
monitor employee satisfaction and initiate improvements. A
lawyer from the Legal Department ensures that every policy
is compliant with the law, the Communication Team translates
measures into clear messages for employees and the public,

enable the implementation of the programs. Together, these
roles act as a unique system that mitigates potential negative
impacts and strengthens the positive ones, thus fostering a
culture of accountability and sustainability within ENT Group.
In addition to the time and expert support from internal

resources, primarily through the development and expansion



medical check ups. This combination of expert support and

create an environment that supports well-being of employees


Nikola Tesla Group pays a variable pay compensation for target


amounts are paid in line with the achievement of the targets
set at the beginning of the year. In 2025, the aforementioned
bonuses were paid in the following companies: Ericsson Nikola



was paid for ENT, EHR, TBA and Libratel.
Additionally, within the framework of investing in employee long-


the employees who are members, 1,930 of them, which accounts
for 67.65% of the total ENT d.d. workforce. For exceptional
performance and contribution to activities on projects,
employees receive individual awards based on manager’s
recommendation.
Furthermore, promotions and awarding innovations encourage
the culture of excellence which also contributes to the personal
satisfaction of employees, and continuous improvements of
processes, tools and solutions, which then contributes to

strengthening a culture of innovations.



debit card that allows the payment for accommodation and
hospitality at selected locations in Croatia.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
89
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
89

through its ENTER Academy, continuously monitors the needs

training, with the aim to ensure that the employees’ knowledge
is aligned with technological development and business needs.
Programs of development and continuous learning enable
employees to acquire new competencies, thus opening up the
way for professional advancement and long-term employability.
Detailed information about employee education can be found in
S1-13.
All these measures are aimed at preventing potential
negative impacts, responding to challenges in timely manner,
encouraging positive changes, with continuous monitoring of

measures is regularly monitored through feedback
mechanisms, including the annual anonymous survey Voice. The
results of the survey are used to assess employee satisfaction
and to adapt to future activities, while transparent reporting

Key activities and workshops in 2025 dedicated to
employee health
As part of the PrevENTion program, numerous educational and

mental and physical health. The emphasis was placed on
strengthening mental resilience and preventing burnout
syndrome, encouraging physical activity and reducing stress,
as well as promoting an active lifestyle and safety in nature,
and we would like to highlight the following workshops:
• Psychological Resilience
• 
• How Exercise and Breathing Restore Balance
• 
• 
• Hiking to mountain Sljeme with the HGSS Workshop on
mountain safety
Medical checkups and employee feedback
In 2025, a total of 1,234 employees had a medical checkup.
After the medical checkup, satisfaction with the service was
assessed through an anonymous survey, whereby an average
score was 4.42 out of 5, which shows a high level of employee
satisfaction.
All the activities within the Wellbeing program are available

usefulness. After the initiatives were carried out:
• 90% of employees who participated would recommend the
topics to their colleagues.
• 86.6% of respondents stated that they acquired new
knowledge, applicable both in their private and professional life.
Ericsson Nikola Tesla Group continues to foster a culture
of health and well-being by developing programs that help
employees maintain balance, energy, and mental resilience. The
goal is a work environment where employees feel supported,
safe and empowered for long-term sustainable work.
S1-5– Targets related to managing
material negative impacts, advancing
positive impacts, and managing material
risks and opportunities
Maintaining a high level of employee engagement
(eEngagement) and satisfaction (eSatisfaction)
Maintaining a high level of employee engagement and
satisfaction represents an important foundation to achieve
business goals and successfully implement Ericsson Nikola
Tesla Group’s strategy. Bearing this in mind, key performance

and improving the satisfaction and engagement of ENT Group’s
employees. These indicators are monitored by conducting an
annual survey “VOICE” at the ENT Group’s level, and by setting





is also an Employee Representative in the Supervisory Board.

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which proves a great interest of employees in two-way

culture. Employee Engagement Index contains several elements
that address the aspects of work, including challenges of the
job, sense of purpose, career development and the quality
of feedback. Employee Engagement Index for 2025 is 75 and
overall remained stable compared to the previous year. Overall
employee satisfaction is 68, which is also equal as the year
before, whereby 63% of employees expressed exceptional
satisfaction and/or satisfaction, 27% is neutral and 10% is

Enhancing employees’ digital competencies in the eld of
Articial Intelligence and Automation
During 2025, ENT intensified activities focused on developing
employees’ digital competencies in the field of artificial
intelligence and automation. In line with the global
technology trends and strategic focus of the company
toward expanding services based on Artificial Intelligence

to increase understanding and practical application of
artificial intelligence in everyday work.
In addition to training, an internal AI chatbot for business
travel processes was also introduced, thus enabling
employees to have faster, simpler and automated support
when submitting requests, making reservations and
tracking travel. This pilot project has additionally confirmed
the value of applying AI solutions and encouraged further
automation planning in other administrative areas.

a target was set on the company level for all employees
to pass at least basic training on using AI, with a focus
on safe use and ethical aspects. Moreover, a significant
number of workforce is undergoing advanced training in
development of products and services that contain or use
AI functionalities in order to improve the portfolio in this
way.



the intention to enhance AI literacy across the entire

technical departments.
This goal contributes to increasing innovation, accelerating
solution deliveries, better decision making, reducing
operating costs and strengthening ENT’s competitiveness.
Through planned training and AI tools introduction,
employees are being prepared for technological changes
and their ability to participate in the company’s further
digital transformation is being strengthened.
AI Hackathon was also held, and all employees had the
opportunity to participate in creating a solution supported
by AI functionalities based on their own original ideas.
There was great interest in hackathon, and the top-ranked
participants were awarded.
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S1-6– Characteristics of the
undertaking’s employees
At the end of 2025, Ericsson Nikola Tesla Group had a total of
2,979 employees, whereby men accounted for 71.16%, while
women accounted for 28.84%.
Employment structure in ENT Group according to
employment type as at December 31, 2025




while only seven employees are part-time employees.
ENT Group employee breakdown by entity and gender as
at December 31, 2025
The largest company within the Group is Ericsson Nikola Tesla

total number of employees. Other entities, including branch

smaller number of employees, with the highest number of


Employee retention
An average number of employees in Ericsson Nikola Tesla Group

employees left due to various reasons, including voluntary
departures, dismissal, retirement, death or expiration of
employment contract.


the turnover of employees who possess key competencies and

compared to 2024. Such a result highlights ENT as an employer
Gender Total 2024 Total 2025
Male 2,083 2,120
Female 830 859
Other 0 0
Not reported 0 0
Total employees 2,913 2,979


employment status as at December 31, 2025, on page 133
that successfully manages key talents and implements

experts within the company.
Methodology of data collection and analysis
The data were collected from an internal employee database
and were processed by applying statistical analysis, whereby
descriptive methods were used. To calculate the number of
employees, a headcount approach was used, which means that
all employees were taken into consideration, regardless of
whether they work full-time or part-time. The date December
31, 2025, was used to present the total number of employees,
while the average number of employees during the year was
used to calculate the turnover rate.
Employment structure and exible forms of work
Ericsson Nikola Tesla Group employs a certain number of


in various life circumstances.
Flexible forms of employment are important for the following
groups:
• Students 
possibility of later employment after they graduate. In
practice, this model proved to be very successful: during
2025, out of 302 students hired in ENT Group, 77 students
later became our employees.
• Retirees 
continuation of professional contribution and knowledge
transfer.
• Parents 
extended parental leave or care for a child with health
issues.
• Personal reasons 
working hours, including permanently working from home,
with the aim of ensuring balance between employees’ work
obligations and personal needs.
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ENT Group employee breakdown by entity and gender as at December 31, 2025
Employment structure in ENT Group according to employment type as at December 31, 2025
Total 2024 Total 2025 Male 2024 Male 2025
Female
2024
Female
2025
M% 2024 M% 2025 F% 2024 F% 2025
ENT Grupa 2,913 2,979 2,083 2,120 830 859 71.51 71.16 28.49 28.84
 2790 2,853 1,992 2,029 798 824 71.40 71.12 28.60 28.88
 47 45 35 33 12 12 74.47 73.33 25.53 26.67
Libratel d.o.o. 25 22 21 18 4 4 84.00 81.82 16.00 18.18
 35 35 25 26 10 9 71.43 74.29 28.57 25.71
Ericsson Nikola Tesla d.d.

16 23 10 13 6 10 62.50 56.52 37.50 43.48
 N/A 1 N/A 1 N/A 0 N/A 100.00 N/A 0,00
Employee state Female 2024 Female 2025 Male 2024
Male
2025
Total 2024 Total 2025
Number of employees 830 859 2,083 2,120 2,913 2,979
Number of permanent employees 804 819 2,013 2,040 2,817 2,859
Number of temporary employees 26 40 70 80 96 120
Number of non-guaranteed hours employees 0 0 0 0 0 0
Number of full-time employees 825 857 2,079 2,115 2,904 2,972
Number of part-time employees 5 2 4 5 9 7
Table of contents
Management
report
Sustainability
report
Financial
statements
report
93
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
93
S1-9 – Diversity metrics
Management and age structure in ENT Group
The highest management level of Ericsson Nikola Tesla Group
consists of the Management Board and the members of the
Executive Management, and their composition on December 31,

administrative, management and supervisory bodies. On December
31, 2024, the highest management level of Ericsson Nikola Tesla
Group consisted of the Management Board and the members of


ENT Group has three age groups of employees, whereby the largest
share of the workforce are employees between the age of 30 to

experienced professionals.
• Employees younger than 30: 


programs.
• Employees between 30 and 50:
which accounts for the largest share of the workforce and

competencies.
• Employees older than 50:
ensures the transfer of knowledge and experience within the

S1-10 – Adequate wages
Adequate system of wages in Ericsson Nikola Tesla Group



adequacy of the salary system.
Methodology to estimate adequate wages
The assessment of an adequate salary was carried out by
comparing the lowest salary of all employees with 60% of the
national median salary or, in cases where this data was not
available, by comparing the lowest employee salary with 50% of
the national average salary. The calculation methodology changed

comparison was performed using national reference values.
S1-11 – Social protection
Social protection and support to employees of Ericsson
Nikola Tesla Group
The Group ensures that employees have access to systems
of social protection and healthcare in all companies in which it
operates. All employees of Ericsson Nikola Tesla d.d. and Ericsson
Nikola Tesla Servisi d.o.o. who work in the Republic of Croatia have
mandatory health insurance at the Croatian Health Insurance

against loss of income during sick leave.
In addition to mandatory health insurance, for the employees in
the Republic of Croatia, the Group provides supplementary health

healthcare and well-being. Furthermore, employees in the Republic
of Croatia are provided with other forms of social protection

Agreement and the Labor Rulebook.
In the other companies within the Ericsson Nikola Tesla Group,

provided with health and social protection in accordance with the
applicable local laws and national social security systems, while
respecting local regulatory frameworks.
Financial support in extraordinary situations
In line with the Collective Agreement of Ericsson Nikola Tesla d.d., the
employees are provided with maximum non-taxable amount in cases
of:
 long-term sick leave or the need for medical treatment, thus

temporary incapacity for work.
 

 birth of a child, whereby employees are provided additional
support while their family is growing.
 retirement, ensuring employees transition to a new phase of

S1-12 – Persons with disabilities
Hiring persons with disabilities in ENT Group
In 2025, 21 employees with disabilities worked in Ericsson Nikola Tesla
Group, which represents 0.73% of the total number of employees.
The recruitment process is carried out in cooperation with the

Employment Service, associations of persons with disabilities,
and with the recommendations from employees. The candidates
are hired based on their competencies and skills in the ICT
sector, whereby they are provided with equal opportunities for
development and professional advancement as other employees.
Obligation of quota employment and the application of the
NERA system
ENT Group monitors its quota obligation of employing persons with
disabilities through the system NERA, which enables employers to:
 electronically submit e-statements, e-announcements,
and e-reports to the Institute for Expertise, Professional
Rehabilitation, and Employment of Persons with Disabilities.
 
quota.
 

2024 2024 % 2025 2025 %
Employees
younger than
30
559 19.19% 565 18.97%
Employees
between 30
and 50
1,906 65.43% 1,907 64.01%
Employees
older than 50
448 15.38% 507 17.02%
Comparative overview of the age structure in ENT Group 2024 / 2025
Table of contents
Management
report
Sustainability
report
Financial
statements
report
94
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
94
S1-13 – Training and skills development
metrics
Employee development and talent management in Ericsson
Nikola Tesla Group
During 2025, Ericsson Nikola Tesla Group continued to invest in
training courses and employee competence development. Through
the activities of the Enter Academy, structure and support for
real business needs were secured, as well as a strategic outlook
towards requirements and challenges that await ENT Group’s
employees in the future, with the aim to maintain professional
excellence.
Performance management and career development


that managers undertake with their employees in an annual
cycle. The goal of this process is to provide employees with
feedback about their work, plan their career development, and

advancement. All the company’s employees are included in the
process through goal setting, regular Check ins with the manager
during the year, and the year-end performance evaluation. Last
year, 96% of the company’s employees were included in this process

used to manage talents, which enables systematic monitoring and
development of employees’ key competencies.
Enter Academy – strategic approach to education
Since April 2024, Enter Academy acts in the company, as well as
on the Group’s level, with the purpose to manage all education.
By combining various programs and types of training, a synergy
is achieved between new technologies and methodologies for
delivering training, and older but proven methods that also
strengthen social, so-called soft skills. Consolidating training
activities enables the preparation of broader and more diverse
programs and coverage of a greater number of topics, both
technical and non-technical, with the equal participation of
employees from all the Group’s members.
The Academy encompasses a wide range of training programs,
including:
 Internal and external programs for continuous development of

 

 Online educations using Coursera, which enables

technical and non-technical areas.
 Participating in professional seminars and
conferences, based on business needs and

 Various internally led training programs and
seminars for active knowledge sharing from

units and the entire company. i.e. Group.
Elementis – training management system
In 2025, ENT Group continued to use and upgrade
Elementis, an internal system for online training
management and employee competence development.
Having been developed within the company, Elementis

thus enabling employees to have easier access to
educational content and development activities.
During the year, Elementis was enhanced with the
functionalities of the employee CV database and the

had available approximately 150 of its own educational
content.
The goal is for Elementis to become a central place to keep
record of all employees educational activities, and to enable,

of the knowledge, skills and education acquired during career
development within ENT Group.
Internal exchange of knowledge and additional initiatives
Except for formal training programs, ENT Group has a series of
internal initiatives focused on knowledge exchange within teams and
between departments, as well as on individual level. These activities
are recorded using time report tool which enables us to monitor
employees’ individual development activities, which are presented in
the Self training column in the table.
Competence development and employee participation in
training during 2025
During 2025, Ericsson Nikola Tesla Group employees attended
more than 72 thousand hours of education, including all recorded
programs and estimated data, which is approximately 3 thousand
hours more compared to 2024. Through various programs, a total







women and men is 34:66, which shows a strong correlation with
the ratio of employed women and men of 29:71, although it indicates

training. Furthermore, a slight upward trend was recorded in the

increase in the use of training available on the online platform.
Employee participation in training programs
Over the year, out of the total number of employees, approximately
92% of employees participated in some kind of training program,
whereby 95% of female employees and 90% of male employees

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2024 2025
 68,927 72,283
 2,913 2,979
Average number of hours of
training per employee (all)
23.66 24.26
Total number of hours of training

25,759 24,404
 830 860
Average number of hours per
female employees (F)
31.03 28.38
Total number of hours of training

43,169 47,879
 2,083 2,119
Average number of hours per
male employee (M)
20.72 22.60
13
For more information, please see BP-2 Disclosures in relation to

sustainability information
employee of the company was 24, whereby female employees
participated in a little over 28 hours of training, while male
employees had an average of a little under 23 hours of training on
annual level. The total, as well as the average number of training
hours, show continuous commitment to the professional and
personal development of employees, which is supported by the

courses, as well as employees’ demand and attendance of such
training.
Structure of training programs
Training encompassed various programs, including:•
 

 

 

 



and development, although a noticeable decline in this category can
be observed in 2025. At the same time, we have been recording a
comparable growth of hours at external online learning platform
Coursera. This indicates a shift toward a more structured and
formal learning program, which is partially due to a more mature
stage of using the online learning platform, which was introduced

establish the system and for our employees to adapt to it.
The following table provides an overview of the total number of
training hours and the average number of training hours per
employee, broken down by gender. The total number of hours
refers to all recorded training participants, while the average
number of hours is calculated based on the total number of
employees within each gender category. For comparability
reasons, the data for 2024 are presented using the same
approach that was applied in 2025.
13
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Training program
Internal soft skill
(Moments)
External soft skill
(Development Hub)
Technical training
(on demand)
Coursera
Seminars and
conferences
Self training
(From time report)
Total
ENT/S programs *
(Estimation based on
video)
Total
(Including ENT/S
programs)
All employees
 4,872 5,952 11,136 20,296 1,600 28,460 72,316 2,132 74,448
 3,027 5,632 11,136 20,296 1,600 28,460 70,151 2,132 72,283
Utility 62% 95% 100% 100% 100% 100% 97% 100% 97%
Total number of Group’s employees 2,979 2,979 2,979 2,979 2,979 2,979 2,979 2,979 2,979
 84 188 352 1,391 152 564 2,731 450* **
*estimation of unique participants


36.04 29.96 31.64 14.59 10.53 50.46 25.69 4.74 **
Share in the total number of employees 3% 6% 12% 47% 5% 19% 92% 15% **
Female
Total number of the Group’s female employees 860 860 860 860 860 860 860 860 860

employees
1,722 1,504 3,705 5,239 592 10,918 23,679 725* 24,404
Number of unique female employees 40 62 118 361 59 176 816 153* **
*estimation from the overall ratio


43.05 24.26 31.40 14.51 10.03 62.03 29.02 4.74 **
Share in the total number of female employees 5% 7% 14% 42% 7% 20% 95% 18% **
Male
Total number of Group’s male employees 2,119 2,119 2,119 2,119 2,119 2,119 2,119 2,119 2,119
 1,305 4,128 7,431 15,057 1,008 17,543 46,472 1407* 47,879
Number of unique male participants 44 126 234 1,029 93 388 1,914 297* **
*estimation from the overall ratio


29.66 32.76 31.76 14.63 10.84 45.21 24.28 4.74 **
Share in the total number of male employees 2% 6% 11% 49% 4% 18% 90% 14% **
Table 1 Distribution of hours of training programs according to
the number of active participants, broken down by gender
* Because the ENT/S training program was carried out via Teams platform, the number
of participants present was determined based on the average attendance rate
compared to the number of those invited, as documented in the original recordings.
However, gender distribution was not directly available. In order to secure the highest
possible accuracy of data, the approximate distribution of men and women was made
based on the ratios established in other thoroughly documented training programs.
This approach enabled consistency and representativeness of the data within the
overall training analysis in ENT Group.
** Taking into account the high coverage of employees recorded in other programs, the
assumption of a substantial overlap of participants in this type of program seemed

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S1-14– Health and safety metrics
Managing Occupation Health and Safety in Ericsson Nikola
Tesla Group
The system of Occupation Health and Safety Management
in ENT Group is based on risk monitoring, targets and key




occupational health and safety professionals.

stress, which are reduced by preventive measures and
programs to preserve employees’ physical and mental health.
Employee training and incident reporting
New employees undergo mandatory legal training on the OHS
system, while line managers are being trained continuously and
in line with the legal deadlines. In 2025, employee training was
launched by using the internal education system Elementis, in

and with a higher quality. Moreover, regular training courses
on current safety-related topics are conducted with ENT Group
members, aiming to further improve the level of occupational
health and safety. A total of 542 employees passed the training
in 2025.

enable timely recognition and cause analysis. Employees are
encouraged to report injuries, illness, accidents and dangerous

on site, or remotely. Regular reminders about reporting
procedures additionally strengthen the culture of safety and
acting in a responsible manner.
Work-related injuries in 2025
During 2025, there were no recorded work-related injuries.
Accordingly, there were no sick-leave days due to work-
related injuries, and we have therefore not calculated the rate
of recorded work-related injuries for ENT Group employees.
During the year there were no reported fatalities, neither
among employees nor among external contractors.
Prevention and improvement of OHS system
Mental and physical health programs are integrated in the work
environment to provide support for employees in managing
stress, and to ensure their well-being. Safety protocols are
continuously being improved, aiming to reduce the risks of
work-related injuries, strictly adhering to health and safety
standards. Risks and opportunities are frequently monitored,
and corrective measures are applied on business processes


Protecting health and safety of external contractors
Ericsson Nikola Tesla Group sets high health and safety
standards not only for its own employees, but also for external
contractors. All contractors are obliged to respect legal
requirements and the Group’s internal standards, with a
clear message that non-compliance with these measures is
unacceptable.
Overall performance review of ENT Group in 2025
The methodology to calculate each indicator listed below
includes data sources at the company level that we record
on injuries and employee data, handle according to legal
requirements of the Republic of Croatia, and further align

and internal methods based on business needs. Since last
year, when we became obliged to report in line with the
ESRS methodology, we have been using the same metric for

transparency and compliance with the requirements.
Disclosure requirement
% / no.
2024
% / no.
2025
Comment
Percentage of people
from own workforce
encompassed by the OHS
system based on legal
requirements and/or

guidelines
98.9 99.8%
All employees of
ENT Group are
encompassed by the

pass training within
60 days from the





Number of fatalities of its
own workforce as a result
of work-related injuries
and work-related ill health
0 0
There were no
fatalities of ENTG
employees in 2025.
Number of fatalities as
a result of work-related
injuries and work-
related ill health of other
workers working on the
undertaking’s sites
0 0
There were no
fatalities of contract
workers in 2025.
Number of recorded
work-related accidents
for own workforce
2 0
In 2025, there were
no work-related
injuries according to

the ESRS standard.
Rate of recorded work-
related accidents for own
workforce
0.33 0.00
There were no work-
related accidents, and
accordingly it was not
necessary to perform
the calculation.
Number of recorded
cases of work-related ill
health of employees
0 0
There were no cases of
ill health in 2025.
Number of work days lost
to work-related injuries
and fatalities from work-
related accidents, work-
related ill health and
fatalities from ill health of
employees
35 0
There were no lost
working hours related
to work-related
injuries.
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S1-15– Work-life balance
Ericsson Nikola Tesla Group, in line with the Labor Act, Collective
Agreement and Labor Rulebook, ensures all employees the
right to family-related leave. In 2025, 10.95% of employees were
entitled to family leave, and 70.29% of them exercised that right.
According to breakdown by gender, 41.53 % of men and 28.75 % of
women used the family-related leave out of the total number of
employees with the right to do so.
S1-16– Compensation metrics (pay gap
and total compensation)
The pay gap in average salary between men and women



factors such as the complexity of the job, level of hierarchy,
age or years of service, is 10.6% in favor of men, while in 2024



complexity levels, rather than from a widespread imbalance.



women, on average, have approximately 7% less work tenure
than men. Furthermore, it is also linked to slower career
development due to longer absence in earlier career stages
due to balancing work and family responsibilities.


continuous measures aimed at ensuring a fair and unbiased pay
system.
The annual total remuneration ratio in 2025 of the President of
the Management Board of Ericsson Nikola Tesla to the median
14
annual total remuneration
15


S1-17 – Incidents, complaints and severe
human rights impacts
During 2025, Ericsson Nikola Tesla Group continuously
monitored activities aimed at protecting employees’ dignity and
respecting human rights in all aspects of business operations,
in accordance with the requirements of ESRS S1, and internal
policies and procedures.
Mechanisms to report and handle complaints
All employees can report irregularities without a fear of
retaliation, in line with the Rulebook on Procedures and

impartial and responsible handling in all cases.
Measures and actions taken
All received complaints regarding the protection of employees’

in line with the internal rules.
During 2025, the Committee for the Protection of Employees’
Dignity received one complaint regarding violation of

of Employees’ Dignity did not receive any complaints, and there
were no recorded incidents related to the violations of human

Protection of Employee’s Dignity, a violation of the Rulebook
constitutes unwanted behavior based on race, ethnicity or
skin color, gender, language, religion, political or other belief,
national or social origin, property status, membership in a
trade union, education, social position, marital or family status,
health condition, disability, genetic heritage, gender identity,
expression or sexual orientation, with the aim of violating
the dignity of the person. Sexual harassment is any verbal,
non-verbal, or physical unwanted conduct of a sexual nature
with the aim to violate an employee’s dignity. Discrimination
is placing employees in a less favorable position based on any
of the above-mentioned grounds. After receiving the report,
the Committee conducted an internal investigation and after
it was completed, the Committee determined that there had
been no violation of the employee’s dignity. As no violation
was established, there were no grounds to take disciplinary

Specic impact - program of awarding
shares
Ericsson Nikola Tesla has a program of allocating shares to
employees since 2004, and has been using it as a mechanism
to reward, motivate, and long-term dedication of employees.
Through this model, employees become the owners of the
company’s shares, which additionally strengthens their

14
The President of Ericsson Nikola Tesla was excluded from the median calculation.
15
The annual total remuneration for 2025 included the following payments: contracted
salary + additional payments, such as: overtime, standby, awards, meals, transport,
Christmas voucher, Short Term Variable, All Employee Award, vacation allowance, Closed
Voluntary Pension Fund payments.
The program is focused on retaining and motivating key
experts, who have been continuously achieving above average

knowledge and skills, which are key to implementing the
company’s business strategy.
There are two models of awarding shares:
• 
exceptional contribution to work in the form of a package
of shares with the right to acquire ownership within a

• 
than a year tenure, whereby the right of ownership is
acquired gradually within a period of two to four years,

In 2025, a new share allocation program was initiated and
carried out in two cycles. A total of 19,300 shares were awarded

importance of this model of awarding, and its role in the long-
term retention of key talents. Ownership rights are acquired
through the transfer of shares, gradually, depending on the

2025, 2,915 shares were exercised to 167 employees according
to the programs from previous years. Since the program was
launched, ENT has had nine cycles of awarding shares. Through
the programs so far, more than 1,400 employees were included
in the program, and more than 70,000 shares were awarded.
This corresponds to a share of approximately 37% of employees
who were granted shares, calculated based on the number of
ENT employees as at 31 December 2025.
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ESRS S4 Consumers and end-users
S4-1– Policies related to consumers and
end-users
Primary business relationships of the ENT Group are focused
on commercial customers, while end-users are downstream
in the value chain. Therefore, ENT Group does not have a

In regard to relationships with business partners, ethical

Partners, while the Code of Business Ethics additionally guides
employees in performing their work in an ethically responsible
manner, considering relations with external stakeholders.
16
S4-2– Processes for engaging with
consumers and end-users about impacts
Considering the ENT Group’s location in the value chain, there
is no direct relationship with consumers and end-users, as
they are located further downstream at the value chain level
of the ENT Group’s customers. In this context, collaboration
related to potential or actual impacts on consumers and end-
users takes place indirectly, through customers and through
established information security and personal data protection
management systems.

and mitigate possible negative impacts on consumers and
end-users that may arise from cyber threats, security
incidents or personal data processing. These activities include
information security management system in line with ISO/
IEC 27001, as well as business continuity management system
according to ISO 22301. Within the systems mentioned, regular
risk assessments, security testing, incident simulations and
continuous monitoring and response to security threats are
carried out.
In this context, cooperation with the customers and relevant
stakeholders occurs through information exchange regarding

as through security incidents management procedures. ENT
Group has established Incident Management Framework, which

solve security incidents, including the incidents that may have
an impact on the end-users of the customers’ systems.
In regard to personal data protection, ENT Group applies the
principles of Privacy by Design and applies the Data Protection

may have an impact on the data subjects. The Group has a Data

protection regulations and serves as a point of contact for
relevant stakeholders in regard to matters related to personal
data processing and potential impacts.
The procedures described enable ENT Group to, despite the
absence of a direct relationship with consumers and end-
users, systematically manage the potential and actual impacts
of its solutions on end-users through collaboration with the
customers, the implementation of preventive measures and
the established mechanisms to manage security and privacy.
S4-3 – Processes to remediate negative
impacts and channels for consumers and
end-users to raise concerns
Although ENT Group does not have a direct business
relationship with the consumers and end-users, the Group has
established external channels through which customers, end-
users of the customers’ systems and the public can report
corruption and other forms of non-compliance. The channels
are published on the company’s web page Company governance
- Ericsson Nikola Tesla d.d. and enable expressing concerns
related to compliance and business conduct.
Anonymous lines in Croatian and English are provided to report
non-compliance, as well as published contact information for all
questions related to business compliance. These channels are
also listed in the Code of Business Ethics and Code of Conduct
for Business Partners, and binding for all business partners
through contractual relationships.

and procedures, and the people using the channel, which
enables feedback, receive information about the status of
the report and its conclusion. Furthermore, administrative,

informed about the reports by Compliance and Investigation

implementation of procedures in line with the relevant
regulatory requirements.
S4-4 – Taking action on material impacts
on consumers and end-users, and
approaches to managing material risks
and pursuing material opportunities
related to consumers and end-users, and
eectiveness of those actions

in technology, frequent innovations and high expectations
in terms of functionalities, security and reliability of digital
solutions. These expectations are additionally shaped by

technology leadership, cyber security, development of digital
skills and trust in digital services. In this context, ENT Group
focuses its measures on maintaining technological relevance,
quality of deliveries and systematic management of customer

on end users. The measures are integrated into the Group’s
regular operations and are aimed at systematically managing

units responsible to implement the aforementioned measures
are R&D Center, Research and Innovations, Business unit Digital
Society, Customer Solutions and Services and IT and Security,
and the activities are carried out in coordination with the
sales units, also including relevant support functions, when
necessary.
16
ENT Group’s policies are described in detail in the chapter Corporate Governance and Due
Diligence.
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Measures and approaches when managing material
impacts, risks and opportunities
One of the key measures to achieve positive impacts is ongoing
investment in employee competencies development, as well as
monitoring global and industrial technological trends. In this
way, the risk of technological obsolescence and misalignment
with market expectations is reduced, simultaneously
strengthening the ENT Group’s ability to deliver solutions
that meet customer requirements and ensure quality user
experience within customer systems.
Customer satisfaction management is based on structured
and repeatable evaluations, which serve as a mechanism for
monitoring the quality of delivery and for the early recognition
of risks related to performance and relevance of the solution.
The insights obtained are also used to identify areas for


were carried out as described below, and the plan is to
maintain the same way of evaluating in 2026.
The evaluations are carried out:
• after the project is delivered, and for long-term projects
after every key milestone
• using ENT Group’s annual customer satisfaction
questionnaire
• through regular evaluations of Ericsson Nikola Tesla’s R&D
Center, performed four times a year by global Ericsson
17
• through semi-annual evaluation meetings
• 


Eectiveness of measures
The results of the annual customer satisfaction questionnaire
in 2025 show additional improvements compared to 2024: 99.09%


23 questionnaires; 19 for the Operator segment, and four for
the Digital Society segment, and has jointly encompassed 110
respondents.
In 2025, the total score for ENT R&D Center was 93%. With such
score in 2025, ENT R&D Center was the best rated provider of

performance in terms of quality and competencies.
Additionally, through semi-annual evaluation meetings



continuity of positive impacts on customers and indirectly end-
users.
Managing material risks with potential impacts on end-
users (indirectly through commercial customers)
In business relationships with Telecommunication Operators
and clients in the Digital Society segment, ENT Group monitors
external factors that can have an impact on the planning,
quality and continuity of delivery, and thus indirectly on end-
user experience in the customers’ systems. Key factors

• a decline in operators’ investments in network


• short project implementation deadlines in the Digital


• unfavorable payment terms related to complex digital
transformation projects, which may increase operational
pressures on delivery.
In order to reduce these risks, ENT Group has been

adjust the way of project planning and implementation, and
improve cooperation with key customers and regulatory
bodies. Pursuant to Article 35, no serious human rights

S4-5– Targets for managing material
negative impacts, advancing positive
impacts, and managing material risks and
opportunities

impacts, risks and opportunities which, given the nature

17
These evaluations cover eight key performance indicators, including execution
capability, excellence in domain and discipline expertise, innovation and operational


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advanced digital solutions.
• Closing the digital gap and improving digital inclusion.
• Building digital infrastructure, as the foundation for the
implementation of digital solutions which increases access to


operational expenses.
 

availability regardless of the location and contribute to
reducing disparities between urban and rural areas.
 
companies to participate more actively in digital economy and

services, e-Government and labor market.
Strong domain expertise, technology leadership, innovation
capacity and highly skilled employees secure a competitive
advantage for ENT Group in developing and implementing
advanced ICT solutions that indirectly contribute to positive
impacts on end-users and society.
relationships with commercial customers and are indirectly

Targets
• Maintaining customer satisfaction above 90%, according to
the satisfaction questionnaires
• Continuously achieving evaluation score of R&D Center
above 90%
Managing negative impacts and risks
• 
market conditions.
• 
quality of delivery and deadlines.
• 
continuously improving the quality of processes and
products.
Opportunities for growth and development
Opportunities for further growth and development have

focusing on:
• 
• Cloud solutions and sustainable technology.
• 5G and programmable networks.
• Digital transformation of the public administration and
large systems.
• Solutions for national and public safety and critical
infrastructure.
Medium-term opportunities lie in:
• Implementation of advanced 5G networks and private
networks, networks for national and public safety, Future

digital transformation projects, development of solutions for

solutions for digital transformation on the global market.
 
transport systems that enable improved real time information,
optimal use of transport infrastructure, improved safety, and
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Governance
The chapter provides an overview of approach to
business ethics, compliance and integrity through
clearly dened polices, rules and control mechanisms of
Ericsson Nikola Tesla Group (ENT Group). It encompasses
key topics, such as anti-corruption, management
of relationships with suppliers, payment practices,
lobbying activities and protection of whistleblowers. The
chapter also addresses the specic impact of eective
management of all aspects of security and data
protection, including cyber resilience and user rights
protection.
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ESRS G1 Business conduct
G1-1 – Business conduct policies and
corporate culture
Ericsson Nikola Tesla Group expects employees and associates
to act in a responsible, ethical and legal manner in all business
activities. Key bylaws and codes of governance are available to
the public on the company’s web pages in Croatian and English
; Company

Upon employment, all employees are required to sign the Code
of Business Ethics of Ericsson Nikola Tesla Group
the basic principles of business conduct. The Code includes the
obligation to respect human rights in all segments of business
operations, protecting employees’ health and safety, and a
responsible approach towards the environment. Moreover,

transparent business, with explicit prohibition of all forms of

and money laundering.
Any suspected violation of the applicable rules or the Code
of Business Ethics can be reported using available reporting

and the channel for anonymous reporting. In cases when the
responsible manager cannot resolve the reported case or
does not act in line with the prescribed procedures, the report


Company governance - Ericsson Nikola Tesla d.d.
ENT Group strives for the Code of Conduct for Business
Partners to be an integral part of every contract with

prevent corruption and other unethical practices, respect
human and employees’ rights, secure fair market competition,
do business responsibly and protect the environment, and also
includes the option to report non-compliance.
In addition to employees and business partners, reports
of suspected irregularities can also be submitted by other
external persons, either directly or anonymously, by using
available reporting channels.
ENT Group does not tolerate discrimination or any retaliation
against persons who report non-compliance in good faith, as
is prescribed by the published internal acts, and informs the
stakeholders thereof also through training. The procedures

internal acts, including also the publicly available Bylaws on
Internal Reporting of Irregularities, which apply to companies in
the Republic of Croatia with more than 50 employees. Ericsson
Nikola Tesla d.d., Ericsson Nikola Tesla Servisi d.o.o. and Libratel
d.o.o. apply Bylaws on Internal Reporting of Irregularities

Deputies are appointed for each of these companies.
In addition to the publicly published Bylaws on Internal Reporting
of Irregularities, Ericsson Nikola Tesla Group also has internal
regulations that prescribe in detail the reporting of violations
of applicable regulations and the Code of Business Ethics
of Ericsson Nikola Tesla Group, investigation procedure and
the conclusion of the investigation process. Furthermore, in
accordance with the Labor Act, a Committee for Receiving and
Resolving Complaints Related to the Protection of Employees’
Dignity has been established. The Committee receives
complaints, conducts investigations and, in the event of a
violation, proposes appropriate sanctions related to the
protection of dignity.
Ways of communicating and implementing policies in the
ENT Group
At ENT Group, policies are communicated through several

purpose of communication. One of the ways is through the
process of drafting and updating policies, which includes
members of the Executive Management, the Security, Risks
and Compliance Board and the Management Board. During
this process, they can propose changes and agree on policy
contents before they are adopted.
Members of the Supervisory Board and Audit Committee are
regularly informed about amendments to existing policies
or the adoption of new policies, with detailed presentation
of the policies relevant to their supervisory and decision-

policies through internal communication channels, including
the intranet, e-mails, and e-bulletin board. Policies related to
labor law also go through a consultation process with union
representatives.

changes in policies in Compliance Newsletter.
Reporting irregularities pursuant to the Act on the
Protection of Persons Reporting Irregularities
Ericsson Nikola Tesla d.d., Ericsson Nikola Tesla Servisi
d.o.o. and Libratel d.o.o. apply Bylaws on Internal Reporting
of Irregularities which regulate procedures for reporting,
investigating and resolving irregularities. These bylaws
ensure the protection of reporting persons and define the
available reporting channels.
Internal reporting includes actions or omissions that are
unlawful or contrary to the aim and purpose of the Act on
the Protection of Persons Reporting Irregularities. This
includes irregularities in public procurement, financial
services, money laundering prevention, product and
transport safety, environmental protection, public health,
consumer rights, and protection of privacy and information
systems security. It also covers violations affecting
the financial interests of the European Union, market
competition, state aid and tax arrangements that are
contrary to the objectives of the regulations.
In addition, other violations of national legislation can
also be reported if they endanger the public interest. ENT
Group ensures multiple reporting channels and provides
protection to reporting parties, including the option of
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anonymous reporting. The procedures for reporting and
investigating irregularities are clearly defined in the
bylaws, and reports are possible through multiple available
channels, with ensured anonymity and protection of the
reporting party.
Persons of Confidence at Ericsson Nikola Tesla d.d., Ericsson
Nikola Tesla Servisi d.o.o. and Libratel d.o.o. are obliged to
receive and confirm reports of irregularities within seven
days, protect the reporting party and take necessary
actions within their jurisdiction. They are also required
to forward reports to professional services, monitor the
progress of the investigation, and provide feedback to the
reporting party within 30 to up to a maximum of 90 days.
The identity of the reporting party must remain protected,
and in the event of unresolved irregularities, the report
may be forwarded to the competent authorities.
ENT Group is responsible for ensuring an internal system
for reporting irregularities, appointing persons of
confidence, and protecting persons reporting irregularities
from any negative consequences. It is also obliged to
ensure the storage of data from reports, record keeping
and taking measures to resolve irregularities, which may
include sanctions for violators or reporting to competent
institutions.
Incident investigation and compliance training at
Ericsson Nikola Tesla Group
All incidents related to business conduct, including those
involving corruption, bribery, and occupational health and
safety, are systematically investigated within the Ericsson
Nikola Tesla Group. The procedures for reporting, conducting
investigations, and the responsibilities of the individuals and

available procedures. Investigations are conducted with the

manner.
Depending on the nature and the severity of the incident,
further decisions and measures are reached by the competent
bodies on the corresponding management level, including
managers and the Management Board, Security, Risk and
Compliance Board, the Audit Committee and the Supervisory
Board.

along with additional programs adapted to certain categories

corruption training is published in annual reports, while detailed
information on the scope, target groups and implementation of
education are delivered through the internal reporting system
to the Executive Management, Management Board, Security,
Risk and Compliance Board, Audit Committee and Supervisory
Board.
All new employees and students attend mandatory introductory

corruption and learn about the key provisions of the Code of
Business Ethics. These courses are held monthly on company
premises and via live broadcast, and a test at the end, i.e.

Targeted workshops on anti-corruption are held for certain

Compliance and Investigation Service, with the support of
internal and external lecturers. Special attention is paid
to employees in functions with a higher risk of corruption,




compliance program.
Strengthening ethical awareness in 2025
In October 2025, training on business compliance requirements
was held for members of supervisory and audit bodies, the
management structure, senior leadership, and representatives
of independent functions. The training was conducted by an
external lecturer, and it covered the topics: Tone at the Top,

In 2025, all new employees, consultants and students of ENT
Group were required to read, understand and sign the Code
of Business Ethics. This further raised awareness of ethical

at the level of ENT Group, 240 employees and 209 students were
hired, and all of them signed a statement upon hiring that they
had read and understood the Code of Business Ethics.
At the beginning of October 2025, as part of the ongoing
activities aimed at maintaining a high level of business
compliance of ENT Group, a new cycle of the mandatory annual
Business Compliance Training was launched in both Croatian and
English. The course was delivered through the internal training
platform Elementis and included key information on relevant
practices, procedures and recommendations, with special
emphasis on anti-corruption principles and fair competition,

applicable obligations and rules of conduct. Until the end of
2025, 2,868 employees, 277 students and 15 external associates
passed the training.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
105
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
105
Training of employees and students on business conduct in
the ENT Group
Attendance of the ENTG Compliance – Anti-corruption & Fair
Overview of the overall training, methods and their
frequency in 2025
With regard to business conduct training, the Compliance

courses, including anti-corruption and market competition.
Records and statistics on all training conducted through the
platform, as well as on the participants of those training
courses, are available to the platform administrators.
Training held for
Employees or
students
of which
managers
Total employees 2,883 249
Total employees in
training
2,868 244
Students in total 299 Not managers
Total students in
training
277 Not managers
Training title
Method and
duration
Frequency
Mandatory
Code of Business
Ethics
reading and
acceptance
by signature;
1 hour
When
entering
employment
or student
work
YES
Compliant


live, in the
classroom
and on the
computer
and including
a test; 0.5
hours
monthly YES
Compliant business
for active
employees and
students
on the
computer
and including
a test; 0.5
hours
annually YES
Anti-corruption
compliance
and Public
Procurement
on the
computer; 2
hours
NO

of interest for
targeted groups
live in the
classroom or
via an app; 0.5
- 1 hour
NO
Compliant business
for supervisory,
audit, managerial,
senior executive,
and independent
functions
live via an
app; 1 hour
annually YES
At the beginning of October 2025, as part of the ongoing
activities aimed at maintaining a high level of business
compliance of ENT Group, a new cycle of the mandatory annual
Business Compliance Training was launched in both Croatian and
English. The course was delivered through the internal training
platform Elementis and included key information on relevant
practices, procedures and recommendations, with special
emphasis on anti-corruption principles and fair competition,

applicable obligations and rules of conduct. Until the end of
2025, 2,868 employees, 277 students and 15 external associates
passed the training.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
106
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
106
G1-2 – Management of relationships with
suppliers
In addition to the Code of Conduct for Business Partners, ,
ENT Group manages relationships with its suppliers through


Partners must adhere to when doing business with Ericsson
Nikola Tesla Group.
ENT Group strives for the Code to be an integral part of a
sourcing contract, and in certain cases, it also accepts the
application of the Supplier’s equivalent Code of Conduct. By

which can include, but are not limited to self-assessments,
surveys, site-visits, or audits.
Transparency in regard to sourcing management is ensured by

and supplier audits. The sourcing process is described in detail
in the internal document Sourcing Process in the ENT Group.


evaluation and management of risks related to suppliers and


linking business entities and monitoring within corporate
structures. During 2025, more than 3,000 business entities were





informed procurement decision making and the assurance of
continuous compliance through regular monitoring and supplier
benchmarking.
A supplier entering a contractual relationship with ENT Group
accepts the Code of Conduct for Business Partners, which,

supplier’s responsible approach towards the environment.
ENT Group does not conduct a separate evaluation; instead,
by accepting the purchase order and signing the contract,

set out in the General Terms and Conditions for Purchasing
Goods and Services, as well as the Ericsson Nikola Tesla Group
Business Partner Environmental Requirements. All the above-
mentioned documents are publicly available at: Suppliers -
Ericsson Nikola Tesla d.d.
ENT Group – Annual supplier audits
ENT Group conducts annual audits of its suppliers, whereby

by the document Supplier Selection Criteria for Audit Plan.
These criteria include total business volume, participation

indicators, exchange of sensitive information, the types of
goods and services provided by the supplier, and participation
in Ericsson projects.
Scope of the audits
Audits can be conducted in accordance with the type of goods
and services supplied by the supplier and with regard to the
following standards and regulations:
• 
• 
• 
• 
• 
• 
Audits conducted in 2025
In 2025, in line with Supplier Audit Plan, eight supplier audits
were conducted, focusing on information security. Two audits
were performed at supplier’s location, while six suppliers were
audited by using the Supplier Self-Assessment Questionnaire.
Supplier audits are carried out by the company’s internal
experts.
The audits conducted did not identify any non-conformities.
G1-3 – Prevention and detection of
corruption and bribery
Employees who notice potential irregularities, including
violations of applicable regulations or the Code of Business
Ethics of Ericsson Nikola Tesla Group are encouraged to
discuss it with their manager, provided that the manager is not

the Compliance and Investigation Service.
Employees of the ENT Group, suppliers and other external
stakeholders can report suspicions of corruption and bribery
through available channels for reporting irregularities,
including the option of anonymous reporting.

making for investigations and improvement measures. The
procedure for reporting and investigation, as well as the
responsibilities of the individuals and bodies involved in the
process, are described in detail and carried out in line with

The Audit Committee or, in more serious cases, the Supervisory
Board, receives a detailed report with suggestions
for corrections and improvements to prevent future
irregularities. Decisions are made by the competent authority,
while the internal Security, Risk and Compliance Board oversees
the implementation of recommended improvements.
Investigators are selected based on the type and severity
of the report, and the selection process is conducted by




is related to a person in the decision-making bodies, that
person is excluded from the decision-making process.
The results of investigations and necessary measures
are decided on by the Audit Committee, or, if the Audit
Committee does not decide or in more complex cases, by the
Supervisory Board. The internal Security, Risk and Compliance
Board is informed about the conclusions and monitors the
Table of contents
Management
report
Sustainability
report
Financial
statements
report
107
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
107
implementation of corrective measures in business processes.
Professional training and conference participation is provided
to functions responsible for compliance and compliance


the Protection of Persons Reporting Irregularities.
At the conference under the motto Compliance in the Age of
Change, held in Zagreb in September, Ericsson Nikola Tesla won
the award The Best in Compliance in the category Best Third-
Party Compliance Program.


2025 the obligation to attend the education and training on
anti-corruption and bribery, as well as all the other employees
of ENT Group, and are already included in the statistics of the

Market Competition stated in G1-1. If we observe the statistics
of the aforementioned course solely by the units mentioned,


Additionally, all the members of the Executive Management,



in training on compliant business requirements held by an
external lecturer and which encompassed three topics: Tone at

G1-4 – Conrmed incidents of corruption
or bribery
During 2025, there were no convictions in the ENT Group for
violations of anti-corruption and bribery regulations, and

bribery.
G1-5 – Political inuence and lobbying
activities
The company Ericsson Nikola Tesla d.d. is registered in the
Register of Lobbyists

of Interest of the Republic of Croatia. In relation to all the
activities connected with lobbying, the company acts in


the provisions of the aforementioned Act, are considered
lobbying. The company regularly participates in conferences,
public consultations on draft regulations, and other activities
which, under the same Act, are not considered lobbying.


During 2025, the member of the Management Board, Milan

registered at the Register of Lobbyists.
G1-6 – Payment practices


approve invoices to avoid delays. Suppliers are regularly
contacted to check the status of commitments.
The average time it takes ENT Group to pay invoices from
the date the contractual or legal payment period begins is 60

suppliers’ categories combined, while paying small and medium-

contracted and actual payment terms for supplier invoices
shows that domestic suppliers are paid on average within 44

the equivalent average payment term for domestic small and



entrepreneurs is 30 days from the date of invoice issuance.
Payment dynamics largely depend on the terms of contracts

external contractors and subcontractors on projects.
Payments to suppliers are made once a week. When it comes
to the category of domestic suppliers, payment compliance

of suppliers, i.e. 57% when it comes to small and medium-


categories of suppliers, i.e. 89% when it comes to small and

of foreign suppliers, payment compliance with the agreed

result of cooperation with the companies within the Ericsson

entrepreneurs; however, within 10 days of the agreed payment




as the adjustment of payment terms to business needs and
contractual obligations.
ENT Group calculated the number of payment days and the
compliance of payments with the agreed terms based on the
total turnover with all suppliers during 2025, excluding items
settled through factoring and employee travel reimbursements


annual turnover.
In 2025, there are no pending court cases related to late


In 2025, the companies of ENT Group had no legal proceedings
related to late payments.
Table of contents
Management
report
Sustainability
report
Financial
statements
report
108
Table of contents
Managament
report
Sustainability
report
Financial
statements
report
108
Specic impact: Eective management
of all aspects of security and data
protection
ENT Group Information security
Ericsson Nikola Tesla Group integrates security into all phases
of business processes and product development by applying
the principles Secure by Design and Privacy by Design. In 2025,
additional emphasis was placed on the adjustment of internal
processes to the requirements of the NIS2 Directive and the
Cybersecurity Act, alongside the continued strengthening
of cyber resilience through the implementation of advanced
security technologies. These include Zero Trust Architecture,





Cyber risk assessments, penetration testing, and phishing
attack simulations are conducted systematically, with the
aim of reducing incident response time and achieving full

Security processes include continuous monitoring and threat
detection and automated response to incidents, thus ensuring

line with the principles of CIA triad. In addition to technical
measures, regular campaigns of raising employee awareness
are carried out by sending Security Newsletters.
Application of ISO/IEC 27001 and ISO 22301
ENT Group continuously improves security processes in order to
respond to new threats and regulatory requirements, thereby
ensuring the trust of clients, partners and regulatory bodies.


management processes, security controls and regular compliance


strategies, risk management processes and regular assessments


and resilience seriously, which is crucial in sectors where sensitive

consequences, and they strengthen the trust of clients and
partners.

which is important for business expansion, entry into new markets,
and participation in tenders where a high level of security and
resilience is required.
Technological data protection and business continuity
management
Advanced security technologies are applied in business processes,


emphasis was placed on resilience against ransomware attacks,
automated system recovery, and strengthening resilience to
multidimensional threats in the global digital environment.
Business continuity exercises and system recovery testing after
disruptions are regularly conducted, thus ensuring the stability of
business processes and readiness to operate in crisis situations.
Security incidents management
During 2025, the security incidents management system was
additionally improved in line with the requirements of NIS2 Directive
and the new Cybersecurity Act. New Incident Management

of reporting, classifying, escalating and resolving incidents. The
framework was integrated with the Security Operations Center


security threats.
In order to strengthen operational readiness, regular cyber-attack
simulations and tabletop exercises are conducted to assess teams’
response and the resilience of business processes. In 2025, no
critical data breach has been recorded.
Achievements in cyber security in 2025
In 2025, ENT Cybersecurity Center of Excellence was founded, and
a program was launched to train employees for the position of


resilience, Zero Trust Architecture was successfully introduced,



platforms have enabled a faster detection of security threats.
In 2025, a comprehensive cyber-attack simulation exercise was
conducted, while phishing campaigns are conducted regularly
in order to raise employee awareness on cybersecurity. In the
context of adapting business processes to the requirements of the
NIS2 Directive, risk assessments for critical systems were carried
out during 2025, and reporting towards the competent authorities
was established.
Personal data protection management in the ENT Group
ENT Group has a strong focus on a high level of personal data
protection in line with GDPR, NIS2 Directive and the guidelines of the


employees, suppliers and other stakeholders. Mandatory training on
personal data protection is also a part of the Introductory Training
for new employees.
Suppliers undergo in-depth due diligence, including security and
privacy controls. ENT Group applies the principles Privacy by Design

projects.
Access to personal data is limited to managers, certain employees
and suppliers, to the extent necessary to perform their jobs, with
the application of contractual and legal protection measures. Data
processing control is carried out through a monitoring system,
including regular checks of key processes and automated tools for
monitoring privacy.
In 2025, no personal data breaches have been recorded.
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Statement on the application of the Code
of Corporate Governance
In 2025, the Company applied the Corporate Governance
Code adopted by the Croatian Financial Services



provisions as of January 1, 2025. Pursuant to the Companies
Act and the Accounting Act, the Company reports about
the application of the Code.
The Company operates in line with good practice of
corporate governance and mostly adheres to the
recommendations of the aforementioned Code. The
explanations of deviations from certain recommendations,
whose application is currently not practical for the
Company, are listed in the Annual Questionnaire on
Compliance with the Corporate Governance Code. The
Questionnaire is available on the websites of the Zagreb
Stock Exchange and the Company’s website.
Exceptions to compliance with the provisions of the Code
refer to the following:
Chapter 3: Appointment of the Management Board
and the Supervisory Board members

The Company does not have formal procedures established
for the appointment of the Management Board and the
Supervisory Board members, for selection of senior
management and succession planning.
In April 2025, a subcommittee of the Supervisory Board was
established: Appointment Committee, that has the task
to prepare the mentioned procedures for appointment
of the Management Board and the Supervisory Board
members, prepare the succession plan for reappointment
or replacement of the Supervisory Board and the
Management Board members, as well as to supervise the
Management Board policy when selecting and appointing
senior management. The Supervisory Board carries out
activities with the aim of compliance with the Code in this
chapter.


The Appointment Committee was established in 2025 and
will carry out activities of compliance with the Corporate
Governance Code, particularly the part referring to
the succession planning and the development of role


Management Board and the Supervisory Board. The Board
will also identify and recommend suitable candidates to the
Supervisory Board.
The Company does not currently have a formally adopted
written policy for the selection and appointment of senior
management; however, the Appointment Committee
oversaw the Management Board practices with regard to
selection and appointment procedures for these positions.
A survey on employee perception regarding gender
equality and equal opportunities in the Company is planned,
with the aim to further improve equality practice and
diversity.
Election of the Supervisory Board members by the Annual

When proposing the candidates for the Supervisory Board
to the Annual General Meeting, the company has published
all information required by law; however, in regard to the
requirements of the Code, the information regarding

published.
The CVs of all the Supervisory Board members are
published on the Company’s web page, showing skills,
knowledge, education and experience through which the
Supervisory Board members contribute to the quality of
work in the Supervisory Board and its subcommittees.
Chapter 4: The Supervisory Board and its committees


Although a formal document has not yet been adopted,
in practice, when selecting each member of the

required competencies for a new member are taken into


number of members and the balanced combination of age,
gender, skills, knowledge, education, as well as professional
and practical experience which is considered necessary


members; three are dependent members and two
members are independent. The Supervisory Board
continuously ensures that its composition includes the
maximum possible number of independent members.

Considering the Supervisory Board’s composition, it is not
possible to fully meet the requirements of independence of
each committee of the Supervisory Board, according to the

least one independent member of the Supervisory Board,
who also serves as the Chairperson of this Committee.
Chapter 5: Management Board
Responsibilities of the Management Board members
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
Information about the system of supervision and
cooperation within the group and intragroup rules are not
available on the company’s web page. In its relations with

applicable law, the articles of association of the companies
within the group, and internal procedures.
Chapter 6: Remuneration of the members of the
Management Board and the Supervisory Board
Remuneration of the Management Board members

Share options are not part of the package of the
Management Board remuneration, therefore, there is no

not exercise these options from the date of grant.

The Company has the remuneration policy for the
Management Board and the decision on the remuneration
for work of the Supervisory Board members, which
are published on the Company’s web page, as well as the
Remuneration Report for the Supervisory Board and the
Management Board. The Company does not have a special
formal remuneration policy for senior management,
however the parameters for remuneration of senior

The assessment of impact of remuneration policies on
gender pay equality was not conducted, however, such
analysis is planned to be carried out by the end of this year.
Chapter 8: Disclosure and transparency

To the greatest extent possible, the Company’s web site
provides information, policies and other documents required
by the Code. The remuneration policy and the remuneration
report for senior management are not available, as the
Company has not formally adopted them. The Company’s
website does not provide the separated Report on the
Company’s Relations with Related Companies, however the
receivables and payables towards related companies are an
integral part of quarterly reports, and detailed transactions
with related persons are presented in the audited annual
report for the respective year.
Chapter 9: Shareholders and the Annual General Meeting

The maximum possible presence of the persons stipulated in
Article 86 of the Code was achieved.
Chapter 10: Stakeholders, sustainability and resilience

The Management Board adopted the Code of Business Ethics
which ensures protection of equality on all grounds and
promotes acting in a fair and nondiscriminatory manner
toward all employees. The Company has not adopted special
policies for inclusive work environment, employee work-life
balance or gender pay equality.
The Company does not have policies related to tax planning,
nor does the Audit Committee specially oversees the

it is the responsibility of the Company to plan results, and thus
also settlement of tax obligations, in line with the applicable
legal framework of the countries where the Company
operates.

The Company does not have continuous training for the
members of the Supervisory Board, Management Board and
employees in regard to gender equality, inclusion of persons
with disabilities and protection of children’s rights. However,
continuous attention is paid to these topics, and they are
covered by the Code of Business Ethics of Ericsson Nikola Tesla
Group which promotes the principles of equality, inclusiveness
and respect for human rights.
Basic characteristics of the Company’s internal control
implementation and risk management related to
nancial reporting
In the ENT Group, the system of internal control and
risk management was established with the aim to ensure

compliance with relevant laws, regulations, internal rules and
standards of corporate governance. The system is based on




ENT Group applies a structured system of internal controls that
encompasses:
- control environment based on the principles of integrity,
ethics, responsible corporate governance,
- policies and procedures that govern key processes of


 
processes, including approvals, alignments, segregation of duties
and IT controls,
- information and communication channels that ensure timely

- monitoring activities, including the work of internal audit,
functions of risk and compliance, and supervision by the Audit
Committee.

Risk management process in ENT Group is integrated in strategic
and operational planning, and includes:
 


- assessment of their probability and potential impact,
 
mitigation.
Special attention is focused on risks that arise from
regulatory requirements, change in accounting standards,
digital transformation and increased requirements related to

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report
Sustainability
report
Financial
statements
report
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Table of contents
Managament
report
Sustainability
report
Financial
statements
report
111


reporting and internal control systems. Pursuant to the Rules
of Procedure and the Code of Corporate Governance, the Audit
Committee:
 
provides recommendations to preserve its integrity
 
control, risk management and internal audit with regard to

• considers the reports from internal and external audit,
oversees the implementation of correction measures and

 
statutory auditor, including the approval of non-audit services
in line with the Pre-Approval Policy
• supervises sustainability reporting, including policies and
procedures related to ESRS requirements
• performs annual self-assessment and reviews its own
Charter.
The Committee meets at least four times a year, with the
participation of the Management Board member responsible

audit, and external auditors when necessary. The conclusions
are reported to the Supervisory Board after each meeting,

The framework of activities and main principles of the
Independent Internal Audit function are described in the
Rulebook on the Independent Internal Audit function in the ENT
Group. Activities encompass, but are not limited to, testing and

management system, risk management and internal control
processes, preparation of the comprehensive reports for the

proposals for improvements.
This includes as follows:
• assessment of exposure to risks in the context of

• assessment of compliance of the conduct of the ENT
Group’s managers, employees and contracted partners with
internal policies, procedures, applicable laws, regulations and
management standards of ENT Group,
 
to ensure compliance with policies, plans, procedures, laws


 

• providing consulting services related to corporate
governance, risk management and control processes, in line

• assessment of certain areas of business at the request
of the Management Board, Audit Committee and/or Security,
Risks and Compliance Board, when necessary.

shares, special rights and voting limitation

Regular Market of the Zagreb Stock Exchange under the
symbol ERNT. The largest single shareholder is Ericsson,
which holds 49.07% ownership stake in the Company. Among
major shareholders are institutional investors, particularly
mandatory and voluntary pension funds, including for example

There is no information about pyramidal structures, mutual
shareholdings nor shareholder agreements that would allow
special control rights. The Company has no issued shares with


pursuant to the Company’s Articles of Association and the
Companies Act.
Table of contents
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report
Sustainability
report
Financial
statements
report
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Table of contents
Managament
report
Sustainability
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Financial
statements
report
112
Body
Number of
members
Independent
members

Supervisory
Board
5
Olgica Spevec,
Ana Vrsaljko
Metelko
Olgica Spevec, Carl Henrik Magnus Carle
Audit
Committee
3
Olgica Spevec,


Magnus Carle
Appointment
Committee
4
Olgica Spevec,
Ana Vrsaljko
N/A
Remuneration
Committee
4
Olgica Spevec,
Ana Vrsaljko
Metelko
N/A
Information about the composition and the activities of the
Management Board and the Supervisory Board and their
committees, including the information on which members of the
Supervisory Board and its committees are independent, and

Information about the composition and the activities of the
Management Board and the Supervisory Board and their

management and supervisory bodies.
Independence and expertise of the Supervisory Board members

are presented in the following table:
Information requested considering the obligation of balanced
representation of women and men in the Supervisory Board

the administrative, management and supervisory bodies.
End of 2025, the composition of the Supervisory Board and the
Management Board of the Company was as follows: 2 women


At the end of 2025, the Company’s Management Board consisted
solely of men, while as of 1 January 2026, the Management

The Supervisory Board’s goals in regard to gender equality
are aligned with the Companies Act and the Code of Corporate
Governance.
For the year 2026, the ENT Group has set the target of at least
30% representation of women in executive management, among
line managers, team and program leads, and all employees, and
this target was incorporated in appointment processes and
talent development policies.
The Company reported on the principles of diversity which
are applied in the framework of executive, management and
supervisory bodies of the company, highlighting gender equality
and other relevant aspects, in the Sustainability Report
2025. Reporting is aligned with the requirements of the ESRS

Table of contents
Management
report
Sustainability
report
Financial
statements
report
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Table of contents
Managament
report
Sustainability
report
Financial
statements
report
113
Table of contents
Management
report
Sustainability
report
Financial
statements
report
115
115
116
116
Finantional statements
report
Consolidated Financial statements report

Responsibilities of the Management and Supervisory Board
for the preparation and approval of the annual consolidated

Independent Auditors’ Report
Statement of comprehensive income

Consolidated statement of changes in equity

Financial statements of Ericsson Nikola Tesla d.d.

Responsibilities of the Management and Supervisory Boards

statements
Independent Auditors’ Report
Statement of comprehensive income

Statement of changes in equity


118
118
122
122
123
125
148
150
150
154
154
156
155
157
148
115
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Ericsson Nikola Tesla Group
Prole of the Parent Company and
its subsidiaries (the Group)
History and incorporation
Ericsson Nikola Tesla d.d. (the Parent Company) is a Croatian company with over seventy years
of continuous operations. It is a leading supplier and exporter of specialized telecommunications
equipment, ICT solutions, software and services in Central and Eastern Europe.
The Parent Company was founded on 13 May 1995, as a result of the privatization of the enterprise
Nikola Tesla - Poduzeće za proizvodnju telekomunikacijskih sistema i uređaja, po.
Ericsson Nikola Tesla d.d. has prepared these consolidated nancial statements for the Parent
Company and its subsidiaries:
• Two are domiciled and active in Croatia:
• Ericsson Nikola Tesla Servisi d.o.o.
• Libratel d.o.o.
• One is domiciled and active in Bosnia i Herzegovina,
• Ericsson Nikola Tesla BH d.o.o.
Principal activities
The principal activities of the Group are research and development of telecommunications
software and services, design, testing and integration of total communications solutions,
managed services, supply and maintenance of communications solutions and ICT solutions,
towards customers within the Ericsson Group, customers in the Republic of Croatia, and
Bosnia and Herzegovina, and several customers in Central and Eastern Europe.
Ericsson Nikola Tesla d.d. is a joint-stock company incorporated in Croatia. The headquarters
of the Parent Company are in Zagreb, Krapinska 45.
Code of Corporate Governance
The Group applies the Code of Corporate Governance of the Zagreb Stock Exchange and meets
the obligations derived therefrom, with the exception of provisions whose application is not
practical at the moment.
Ericsson Nikola Tesla d.d.
Consolidated Financial
Statements and
Independent Auditor’s
Report
31 December 2025
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Prole of the Parent Company and its
subsidiaries (the Group) (continued)
Ericsson Nikola Tesla Group
Management Board
The Management Board members:
Siniša Krajnović
President of the Management
Board
Appointed on 25 September 2025, eective
on 1 November 2025
Gordana Kovačević
President of the Management
Board until 1 November 2025
Appointed on 9 April 2025, until then the
only member of the Management Board
Hrvoje Benčić member of the Management Board Appointed on 9 April 2025
Damir Bušić member of the Management Board Appointed on 9 April 2025
Milan Živković
member of the Management Board
Appointed on 9 April 2025
Resigned on 31 March 2026
Branka Vučemilo
Elezović
member of the Management Board Appointed on 1 January 2026
Executive management
Members of the Executive Management:
Siniša Krajnović President of the Management Board
Branka Vučemilo Elezović Member of the Management Board and Director, Legal
Hrvoje Benčić Member of the Management Board and Director,Customer Solutions
and Services
Damir Bušić Member of the Management Board and Director, Finance and Business
Operations
Milan Živković Member of the Management Board and Director, Strategy and
Business Development and GIR
Andrej Grgurić Director, Research and Innovations
Antonija Lončar Director, Marketing and Communications
Branko Dronjić Director, IT&Test Environment Operations
Drago Holub Director, R&D Center
Goran Ožbolt Director, General Services
Ivan Barać Director, Sales and Marketing for Hrvatski Telekom and Crnogorski
Telekom
Jagoda Barać Director, Sales and Marketing for Export markets for Operators
segment
Miroslav Kantolić Director, Sales and Marketing for A1 Croatia, Telemach HR and
alternative operators
Tihomir Fabeta Director, ICT for Digital Society
Vjeran Buća Director, Sales and Marketing for Digital Society
Željko Antolić Director, Human Resources and Culture
Ericsson Nikola Tesla Group
Prole of the Parent Company and its
subsidiaries (the Group) (continued)
Luca Orsini
Chairperson from 14
November 2025
Appointed on 14 November 2025
Stefan Kötz
Chairperson until 14
November 2025
Appointed on 22 November 2024
Olgica Spevec
Member; Deputy
Chair
Appointed on 13 June 2019; reappointed for
Deputy Chair of Supervisory Board on 14 June 2023
Ana Vrsaljko Metelko Member
Appointed on 29 June 2021; reappointed on 26 June
2025
Petar Šimundža
Member and
employees’
representative
Appointed on 29 November 2022
Carl Henrik Magnus Carle Member Appointed on 14 June 2023
Supervisory Board, Audit Committee, Management Board and executive
management of Ericsson Nikola Tesla d.d.
Supervisory Board
The Supervisory Board members during 2025 and up to the release of these consolidated statements
were:
Audit Committee
The Audit Committee members during 2025 and up to the release of these consolidated statements
Olgica Spevec Chairperson Appointed on 17 December 2020
Vesna Vašiček Member Appointed on 21 February 2017
Carl Henrik Magnus Carle Member Appointed on 29 June 2023
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Ericsson Nikola Tesla Group
Consolidated statement of
comprehensive income
Ericsson Nikola Tesla Group
Consolidated statement of
nancial position
for the year ended 31 December 2025 as at 31 December 2025
2025 2024
Notes EUR ‘000 EUR ‘000
Sales revenue 5, 6 238,590 249,473
Cost of sales 7 (210,313) (221,053)
Gross prot 28,277 28,420
Selling expenses 7 (5,860) (5,769)
Administrative expenses 7 (6,705) (6,377)
Other operating income 7 5,208 5,909
Impairment loss on nancial assets (15) (39)
Operating prot 20,905 22,144
Finance income 9 1,074 1,881
Finance costs 9 (483) (777)
Finance income/(costs), net 9 591 1,104
Prot before tax 21,496 23,248
Income tax 10 (3,748) (7,651)
Prot for the year 17,748 15,597
Other comprehensive income
Currency translation dierences - -
Total comprehensive income for the year 17,748 15,597
Earnings per share (EUR) 11 13.37 11.76
2025 2024
Assets Notes EUR ‘000 EUR ‘000
Non-current assets
Property, plant and equipment 12 14,064 14,896
Right of use assets 28 13,012 14,258
Intangible assets 13 2,126 1,150
Loans and receivables 14 662 1,267
Deferred tax assets 10 2,756 2,658
Total non-current assets 32,620 34,229
Current assets
Inventories 15 10,807 9,567
Trade receivables 16 24,997 24,960
Receivables from related parties 29 (c) 44,149 39,458
Other receivables 17 2,122 4,662
Income tax receivables 1,532 1,133
Prepayments 2,247 2,549
Financial assets at fair value through prot
or loss
18 4,729 4,393
Cash and cash equivalents 19 47,193 58,733
Total current assets 137,776 145,455
Total assets 170,396 179,684
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Ericsson Nikola Tesla Group
Consolidated statement of
nancial position (continued)
as at 31 December 2025
2025 2024
Equity and liabilities Notes EUR ‘000 EUR ‘000
Equity
Share capital 20 (a) 17,674 17,674
Treasury shares 20 (b) (3,503) (1,140)
Legal and other reserves 20 (c) 3,001 2,020
Reserve for treasury shares 20 (d) 6,803 7,413
Retained earnings 45,833 42,045
Total equity 69,808 68,012
Non-current liabilities
Borrowings 21 3 15
Lease liabilities 28 11,530 12,601
Other non-current liabilities 22 - 1
Employee benets 23 (a) 1,700 1,047
Total non-current liabilities 13,233 13,664
Current liabilities
Payables to related parties 29 (c) 13,144 16,428
Borrowings 21 7,403 -
Trade and other payables 24 26,462 39,656
Income tax payable 3 2,124
Provisions 25 2,077 1,227
Accrued charges and deferred revenue 26 14,668 15,662
Contract liabilities 27 21,422 20,789
Lease liabilities 28 2,176 2,122
Total current liabilities 87,355 98,008
Total liabilities 100,588 111,672
Total equity and liabilities 170,396 179,684
Ericsson Nikola Tesla Group
Consolidated statement of
changes in equity
for the year ended 31 December 2025
Share
capital
Treasury
shares
Legal and
other
reserves
Reserve for
treasury
shares
Retained
earnings
Total
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
As at 1 January 2024 17,674 (1,256) 1,230 4,157 50,660 72,465
Changes in equity for 2024
Total comprehensive income - - - - 15,597 15,597
Dividend distribution for 2023, Note
20 (e)
- - - - (19,880) (19,880)
Purchase of treasury shares, Note
20(e)
- (628) - - - (628)
Shares granted, Note 23 (b) - 744 - (744) - -
Transfer, Note 20 (c) - - 790 4,000 (4,790) -
Share-based payments, Note 23 (b) - - - - 458 458
Total contributions by and
distributions to owners of the
parent recognized directly in equity
- 116 790 3,256 (24,212) (20,050)
As at 31 December 2024 17,674 (1,140) 2,020 7,413 42,045 68,012
As at 1 January 2025 17,674 (1,140) 2,020 7,413 42,045 68,012
Changes in equity for 2025
Total comprehensive income - - - - 17,748 17,748
Dividend distribution for 2024, Note
20 (e)
- - - - (13,976) (13,976)
Purchase of treasury shares, Note
20 (b)
- (2,973) - - - (2,973)
Shares granted, Note 23 (b) - 610 - (610) - -
Transfer, Note 20 (c) - - 981 - (981) -
Share-based payments, Note 23 (b) - - - - 997 997
Total contributions by and
distributions to owners of the
parent recognized directly in equity
- 2,363 981 (610) (13,960) (15,952)
As at 31 December 2025 17,674 (3,503) 3,001 6,803 45,833 69,808
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Consolidated statement of
cash ows
Ericsson Nikola Tesla Group
for the year ended 31 December 2025
2025 2024
Notes EUR ‘000 EUR ‘000
Cash ows from operating activities
Prot before tax 21,496 23,248
Adjustments for:
Depreciation and amortization 7, 12, 13,28 5,202 5,277
Impairment losses and reversals (167) (39)
(Gain)/loss on sale of property, plant and equipment (165) (37)
Net loss/(gain) on remeasurement of nancial assets (80) (158)
Amortization of discount - (2)
Interest income (986) (1,718)
Dividend income (8) (1)
Interest expense 453 759
Foreign exchange (gain)/loss, net 2 (29)
Share-based payments 23 (b) 997 458
Changes in working capital:
In receivables 5,595 1,877
In inventories (1,240) 439
In provisions (1,504) (251)
In payables (8,827) (12,110)
Cash generated from operations 23,776 17,713
Interest paid (453) (762)
Income taxes paid (5,790) (6,654)
Net cash from operating activities 17,533 10,297
Cash ows from investing activities
Interest received 944 1,705
Dividends received 8 1
Proceeds from sale of property, plant and equipment 158 356
Purchases of property, plant and equipment, and intangible
assets
(3,955) (2,392)
Deposits given to nancial institutions, net 729 -
Net change in nancial assets at fair value through prot or
loss
(256) -
Net cash used in investing activities (2,372) (330)
Consolidated statement of cash
ows (continued)
Ericsson Nikola Tesla Group
for the year ended 31 December 2025
2025 2024
Notes EUR ‘000 EUR ‘000
Cash ows from nancing activities
Repayment of borrowings 21 (7,275) (1,256)
Purchase of treasury shares 20 (b) (2,979) (628)
Dividends paid 20 (e) (14,137) (19,897)
Payment of lease liabilities 28 (2,303) (2,097)
Net cash used in nancing activities (26,694) (23,878)
Eects of exchange rate changes on cash and cash equivalents (7) (11)
Net (decrease)/increase in cash and cash equivalents (11,540) (13,922)
Cash and cash equivalents at the beginning of the year 58,733 72,655
Cash and cash equivalents at the end of the year 19 47,193 58,733
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Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
1 Material accounting policies 1 Material accounting policies
(continued)
Reporting entity
Ericsson Nikola Tesla d.d. (the Parent Company) is a joint-stock company incorporated and domiciled
in Croatia. The address of its registered oce is Krapinska 45, 10000 Zagreb, the Republic of Croatia.
The Parent Company’s shares are listed on the Public Joint Stock Company listing on the Zagreb
Stock Exchange. Ericsson Nikola Tesla d.d. has prepared these consolidated nancial statements as
at 31 December 2025 and for the year then ended for the Parent Company, its subsidiaries of which
two are domiciled and active in Croatia and one in Bosnia and Herzegovina (together “the Group”). A
summary of the Group’s principal accounting policies is set out below.
Statement of compliance
The consolidated nancial statements of the Group have been prepared in accordance with
International Financial Reporting Standards adopted by the European Union (IFRS). These
consolidated nancial statements also comply with the Croatian Accounting Act in eect on the
date of issue of these consolidated nancial statements. These consolidated nancial statements
are a translation of the ocial statutory IFRS consolidated nancial statements.
Basis of preparation
The consolidated nancial statements are prepared on the historical cost basis, with the exception
of nancial instruments which are carried at fair value. These comprise derivative nancial
instruments and nancial assets and liabilities at fair value through prot or loss. Policies have
been consistently applied to all the periods presented, unless otherwise stated (refer to Note 2).
The preparation of consolidated nancial statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that aect the application of
policies and reported amounts of assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis of making
the judgements about carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may dier from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period in which the estimate is revised if the revision
aects only that period or in the period of revision and future periods if the revision aects both
current and future periods. Judgements made by executive management in the application of IFRSs
that have signicant eect on the consolidated nancial statements and estimates are discussed
in Note 4.
Going concern
The executive management have a reasonable expectation that the Group has adequate resources
to continue in operational existence for the foreseeable future. The Group therefore continues to
adopt the going concern basis in preparing its consolidated nancial statements.
Functional and presentational currency
Items included in the nancial statements of each of the Group’s entities are measured using
the currency of the primary economic environment where the entity operates (‘the functional
currency’). The consolidated nancial statements are presented in EURO (EUR), which is the Parent
Company’s functional and the Group’s presentation currency and have been rounded to the nearest
thousand.
Revenue recognition
IFRS 15 “Revenue from Contracts with Customers” is a principle-based model of recognizing revenue
from customer contracts. It has a ve-step model that requires revenue to be recognized when control
over goods and services are transferred to the customer.
The following paragraphs describes the types of contracts, when performance obligations are
satised, and the timing of revenue recognition. They also describe the normal payment terms
associated with such contracts and the resulting impact on the statement of nancial position over
the duration of the contracts. The vast majority of the Group’s business is for the sale of standard
products and services.
Standard solution
Products and services are classied as standard solutions if they do not require signicant installation
and integration services to be delivered. Installation and integration services are generally completed
within a short period of time from the delivery of the related products.
These products and services are viewed as separate distinct performance obligations. This type of
customer contract is usually signed as a frame agreement and the customer issues individual purchase
orders to commit to purchases of products and services over the duration of the agreement.
Revenue for standard products shall be recognized when control over the equipment is transferred
to the customer at a point in time. This assessment shall be viewed from a customer’s perspective
considering indicators such as transfer of titles and risks, customer acceptance, physical possession,
and billing rights. Control of an asset therefore refers to the ability to direct use of and obtain
substantially all of the remaining benets from the asset.
Furthermore, control includes the ability to prevent other entities from using and obtaining the benets
from an asset. The benets of an asset are the potential cash ows (inows or savings in outows)
that can be obtained directly or indirectly. For hardware sales, transfer of control is usually deemed to
occur when the equipment arrives at the customer site and for software sales, when the licenses are
made available to the customer. Software licenses may be provided to the customer at a point in time,
activated or ready to be activated by the customer at a later stage, therefore revenue is recognized
when customer obtains control of the software.
Contractual terms vary, therefore judgment will be applied when assessing the indicators of transfer
of control. Revenue for installation and integration services is recognized upon completion of the
service. Costs incurred in delivering standard products and services are recognized as costs of
sales when the related revenue is recognized in the Income Statement. Costs incurred relating to
performance obligations not yet fully delivered are recognized as inventories.
Transaction prices under these contracts are usually xed, and mostly billed upon delivery of the
hardware or software and completion of installation services. Customer nance agreements may be
agreed separately with some customers where payment terms exceed 179 days.
Revenue for recurring services such as customer support and managed services is recognized as the
services are delivered, generally pro-rata over time. Costs incurred in delivering recurring services
are recognized as cost of sales as they are incurred. Transaction prices under these contracts are
billed over time, often on a quarterly basis.
Contract liabilities or receivables may arise depending on whether the quarterly billing is in advance or
in arrears. Contract for standard products and services applies to business in all segments.
Customized Solution
Some products and services are sold together as part of a customized solution to the customer. This
type of contract requires signicant installation and integration services to be delivered within the
solution, normally over a period of more than 1 year. These products and services are viewed together
as a combined performance obligation. This type of contract is usually sold as a rm contract in which
the scope of the solution and obligations of both parties are clearly dened for the duration of the
contract.
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Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
1 Material accounting policies
(continued)
1 Material accounting policies
(continued)
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
Revenue recognition (continued)
Customized solution (continued)
Revenue for the combined performance obligation shall be recognized over time if progress of
completion can be reliably measured and enforceable right to payment exists over the duration
of the contract. The progress of completion is estimated by reference to the output delivered
such as achievement of contract milestones and customer acceptance. This method determines
revenue milestones over the duration of the contract, and it is considered appropriate as it
reects the nature of the customized solution and how integration service is delivered in these
projects.
If the criteria above are not met, then all revenue shall be recognized upon the completion of
the customized solution, when nal acceptance is provided by the customer. Costs incurred
in delivering customized solutions are recognized as costs of sales when the related revenue
milestone is recognized in the Income Statement. Costs incurred relating to future revenue
milestones are recognized as Inventories and assessed for recoverability on a regular basis.
Transaction price under these contracts is usually a xed fee, split into a number of progress
payments or billing milestones as dened in the contract. In most cases, revenue recognized is
limited to the progress payments or unconditional billing milestones over the duration of the
contract, therefore no contract asset or contract liability arises on these contracts. Customer
nance agreements may be agreed separately with some customers where payment terms exceed
365 days. Contract for customized solution applies to the Industry and Society business, Business
Support Systems (BSS) business, within the segment Digital Services, and the Media Solutions
business within the segment Emerging Business and Other.
Right to use (RTU)
The nature of Ericsson’s promise is to provide a right to use Ericsson’s IP as it exists (in terms of
form and functionality) at the point in time at which the license is granted to the customer. This
means that the customer can direct the use of, and obtain substantially all the remaining benets
from, the license at the point in time at which the license transfers.
Customer contract related balances
Trade receivables include amounts that have been billed in accordance with customer contract
terms and amounts that the Group has an unconditional right to, with only passage of time before
the amounts can be billed in accordance with the customer contract terms. Customer nance
credits arise from credit terms exceeding 179 days in the customer contract or a separate
nancing agreement signed with the customer. Customer nance is a class of nancial assets
that is managed separately from receivables. See note 30(d) for further information on credit risk
management of trade receivables and customer nance credits.
In accordance with IFRS 15, where signicant nancing is provided to the customer, revenue is
adjusted to reect the impact of the nancing transaction. These transactions could arise from
the customer nance credits above if the contracted interest rate is below the market rate or
through implied nancing transactions due to payment terms of more than one year from the date
of transfer of control.
Contract asset is unbilled sales amount relating to performance obligation that has been satised
under customer contract but is conditional on terms other than only the passage of time before
payment of the consideration is due. Under previous standards these unbilled sales balances have
been included within trade receivables. Contract liability relates to amounts that are paid by or due
from customers for which performance obligations are unsatised or partially satised. Under
previous standards these balances have been disclosed as deferred revenue within other current
liabilities, and the Group concluded that the balances meet the denition of contract liability under
IFRS 15. Advances from customers are also included in the contract liability balance.
Property, plant and equipment
Items of property, plant and equipment are shown at cost or deemed cost, less accumulated depreciation
and impairment losses.
The Group recognizes in the carrying amount of an item of property, plant and equipment the cost of
replacing part of such an item when that cost is incurred if it is probable that the future economic
benets embodied with the item will ow to the Group and the cost of the item can be measured reliably.
All other expenditure on repairs and maintenance is expensed as incurred. Where parts of an item of
property, plant and equipment have dierent useful lives, they are accounted for as separate items of
property, plant and equipment.
Land is not depreciated. Depreciation on other assets is provided on a straight-line basis to allocate their
cost over the estimated economic useful life of the assets. The estimated useful lives are as follows:
Useful lives
Buildings 5 – 30 years
Plant and equipment 2 – 10 years
Other 5 – 7 years
The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at
each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and
losses on disposals are determined by comparing proceeds with carrying amount and are included in the
consolidated statement of comprehensive income.
Intangible assets acquired separately
Intangible assets are stated on initial recognition at cost and subsequently at cost less accumulated
amortization and impairment losses.
Amortization is provided on a straight-line basis over the estimated useful lives of intangible assets.
Intangible assets include acquired computer software and are amortized on a straight-line basis over
their useful life of 2–4 years. Cost associated with maintaining computer software is recognized as an
expense as incurred.
Internally generated intangible assets
Expenses resulting from research activities are recognised as expenses for the period in which they
arise. Costs incurred for the development of products to be sold, leased, or otherwise marketed or
intended for internal use are capitalized as from when technological and economic feasibility has been
established until the product is available for sale or use.
Subsequent to initial recognition, internally developed intangible assets are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets
that are acquired separately. Amortization of capitalized development expenses is made according to the
straight-line method over their estimated useful lives, which is normally three years. Internally developed
intangible assets are included in software development and intangible assets under construction.
Impairment of non-nancial assets
Assets that have an indenite useful life (such as goodwill) are not subject to amortization and are tested
annually for impairment. Assets that are subject to amortization 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 recognized 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 identiable cash ows (cash-generating units). Non-nancial assets other
than goodwill, are reviewed for possible reversal of the impairment at each reporting date.
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Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
1 Material accounting policies
(continued)
Financial assets at amortized cost
Financial assets are classied as amortized cost if the contractual terms give rise to payments
that are solely payments of principal and interest on the principal amount outstanding and the
nancial asset is held in a business model whose objective is to hold nancial assets in order to
collect contractual cash ows. These assets are subsequently measured at amortized cost using
the eective interest method, minus impairment allowances. Interest income and gains and losses
from nancial assets at amortized cost are recognized in nancial income.
Financial assets at fair value through prot or loss (FVTPL)
A nancial asset is classied as held for trading if it is acquired principally for the purpose of
selling in the near term. Derivatives are classied as held for trading, unless they are designated
as hedging instruments for the purpose of hedge accounting. Assets held for trading are classied
as current assets. Debt instruments classied as FVTPL, but not held for trading, are classied on
the balance sheet based on their maturity date (i.e. those with a maturity longer than one year are
classied as non-current). Investments in shares and participations are classied as FVTPL and
classied as non-current nancial assets. Gains or losses arising from changes in the fair values
of the FVTPL category (excluding derivatives and customer nancing) are presented in the income
statement within nancial income in the period in which they arise. Gains and losses on derivatives
are presented in the income statement as follows. Gains and losses on derivatives that hedge
foreign exchange risks are presented as net foreign exchange gains and losses. Gains and losses
on customer nancing are presented in the income statement as selling expenses. Dividends are
recognised as other income in prot or loss when the right to receive payment is established.
Cash and cash equivalents
Cash comprises cash held at banks and on hand. Cash equivalents include demand deposits and time
deposits with maturities up to three months. Cash and cash equivalents are carried at amortized
cost because: (i) they are held for collection of contractual cash ows and those cash ows
represent solely payments of principal and interest, and (ii) they are not designated at fair value
through prot and loss.
Impairment of cash, trade receivables and contract assets
Financial assets aected by the new model are cash and cash equivalents, deposits, trade
receivables and contract assets
Two unied models were developed for relatable nancial assets. Cash equivalents and deposits are
assessed for impairment under one unied model and trade receivables and contract assets are
assessed for impairment under another unied model. Cash equivalents and deposits are assessed
based on probability of default as well as Group exposure to certain nancial institution at the time
of default. To determine probability of default, country credit rating of nancial institution is used,
as well as the rating of future outlook is used.
Expected loss on cash, cash equivalents and deposits for each nancial institution gives the total
expected credit loss. There were no signicant changes to the model during the year. The Group
has determined that credit risk largely depends on both the payment pattern of the customer
as well as the risk in the country where the customer resides (e.g. ability to make cross-border
payments).
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
1 Material accounting policies
(continued)
Impairment of cash, trade receivables and contract assets (continued)
Therefore, expected credit losses (ECLs) are calculated using a provision matrix that species a xed
rate depending both on the number of days past due and the country risk rating. The country risk
ratings depend on the ratings used by all Export Credit Agencies within the OECD. The rates dened in
the provision matrix are based on historical loss patterns for certain portfolio of customers. Each
customer is regulatory monitored and these rates are adjusted for current conditions as well as
management expectations for changes to political risks and payment patterns of certain customer in
the future. There were no signicant changes to the model during the year.
Trade and other payables
Trade and other payables are initially recognized at fair value and subsequently measured at
amortized cost using the eective interest rate.
Financial liabilities
Financial liabilities are recognized when the Group becomes bound to the contractual obligations
of the instrument. Financial liabilities are derecognized when they are extinguished, i.e. when the
obligation specied in the contract is discharged, cancelled or expires.
Inventories
Inventories are stated at the lower of cost and net realizable value. Net realizable value is the
estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses. The cost of other inventories is based on the First In First Out (FIFO) principle
and includes expenditures incurred in acquiring the inventories and bringing them to their existing
location and condition. In case of manufactured inventories, the cost includes materials, labor and
related overhead, and expenditure incurred in acquiring the inventories and bringing them to their
existing location and condition. Slow-moving and obsolete inventories have been written down to their
estimated realizable value.
Share capital
Share capital is stated in euro at nominal value.
Incremental costs directly attributable to the issue of new ordinary shares or options are shown in
equity as a deduction, net of tax, from the proceeds. Where the Parent Company purchases its own
equity share capital (treasury shares), the consideration paid, including any directly attributable
incremental costs (net of income taxes), is deducted from equity attributable to the equity holders
until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued,
any consideration received, net of any directly attributable incremental transaction costs and the
related income tax eects, is included in equity attributable to the equity holders.
Income tax
The tax expense for the period is based on taxable prot for the year and comprises current and
deferred tax. Income tax is recognized in the consolidated statement of comprehensive income
except to the extent that it relates to items recognized directly in equity, in which case it is
recognized in equity. The current income tax charge is calculated on the basis of the tax laws enacted
or substantively enacted at the balance sheet date in the countries where the Parent Company and
its subsidiaries operate and generate taxable income. Management periodically evaluates positions
taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to be
paid to the tax authorities.
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Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
1 Material accounting policies
(continued)
Income tax (continued)
Deferred income tax is recognized by using the balance sheet liability method on temporary
dierences arising between tax basis of assets and liabilities and their carrying amount in the
nancial statements. However, the deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the
time of the transaction does not aect either accounting or taxable prot or loss. Deferred tax
assets and liabilities are not discounted and are classied as non-current assets and/or liabilities
in the balance sheet. Deferred tax assets are recognized when it is probable that sucient taxable
prots will be available against which the deferred tax assets can be utilized. At each balance
sheet date, the Group reassesses unrecognized deferred tax assets and the carrying amount of
deferred tax assets. Deferred income taxes reect the net tax eects of temporary dierences
between the carrying amounts of assets and liabilities for nancial reporting purposes and the
amounts used for income tax purposes. Deferred tax assets and liabilities are measured by using
the tax rates expected to apply to taxable prot in the years in which those temporary dierences
are expected to be recovered or settled based on tax rates enacted or substantially enacted at the
balance sheet date.
The measurement of deferred tax liabilities and deferred tax assets reects the tax consequences
that would follow from the manner in which the enterprise expects, at the balance sheet date, to
recover or settle the carrying amount of its assets and liabilities.
Foreign currencies
Transactions denominated in foreign currencies are translated into functional currency at the
rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in
foreign currency at the balance sheet date have been translated to functional currency at the
foreign exchange rate ruling at that date. Foreign exchange dierences arising from translation
are included in the consolidated statement of comprehensive income. Non-monetary assets
and liabilities denominated in foreign currencies that are stated at fair value are translated to
functional currency at foreign exchange rates ruling at the dates the values were determined.
Non-monetary assets and items that are measured in terms of “historical cost of a foreign
currency” are not retranslated.
Items included in the nancial statements of each of the Group’s entities are measured using
the currency of the primary economic environment where the entity operates (‘the functional
currency’). The consolidated nancial statements are presented in Euro (EUR), which is the Parent
Company’s functional and the Group’s presentation currency.
The results and nancial position of all the Group’s entities with a functional currency dierent
from the presentation currency are translated into the presentation currency as follows:
1. assets and liabilities for each balance sheet presented are translated at the closing rate at the
date of that balance sheet;
2. income and expenses for each income statement are translated at average exchange rates; and
3. all resulting exchange dierences are recognized in other comprehensive income.
On consolidation, exchange dierences arising from the translation of the net investment in foreign
operations are taken into other comprehensive income. When a foreign operation is sold, exchange
dierences that were recorded in equity are reclassied from other comprehensive income to the
income statement as part of the gain or loss on sale.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
1 Material accounting policies
(continued)
Employee benets
a) Long-term service benets
The Group provides employees with jubilee and one-o retirement awards. The obligation and
costs of these benets are determined by using the Projected Unit Credit Method. The Projected
Unit Credit Method considers each period of service as giving rise to an additional unit of benet
entitlement and measures each unit separately to build up the nal obligation. The obligation is
measured at the present value of estimated future cash ows using a discount rate that is similar
to the interest rate on government bonds where the currency and terms of the government
bonds are consistent with the currency and estimated terms of the benet obligation.
b) Share-based payments
The Group operates an equity-settled, share-based compensation plan allowing the employees to
receive shares according to internal policy. The fair value of the employee services received in
exchange for the grant of the shares is recognized as an expense with a corresponding increase
in equity. The fair value is measured at grant date and spread over the period during which the
employees become unconditionally entitled to the shares. The total amount to be expensed over
the vesting period is determined by reference to the fair value of the shares granted. At each
balance sheet date, the Parent Company revises its estimates of the number of shares that are
expected to become granted. It recognizes the impact of the revision of original estimates, if
any, in the consolidated statement of comprehensive income, with a corresponding adjustment to
equity. When distributed upon vesting date, treasury shares are credited at average purchase
cost and recorded against retained earnings.
c) Bonus plans
The Group recognizes a liability and an expense for bonuses as a provision where contractually
obliged or where there is past practice that has created a constructive obligation.
Provisions
A provision is recognized when the Group has a present obligation (legal or constructive) as a
result of a past event and it is probable (i.e. more likely than not) that an outow of resources
embodying economic benets will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and
adjusted to reect the current best estimate. The most signicant provisions in the consolidated
nancial statements are provisions for warranty claims, penalty claims and litigation. If the eect
is material and if the obligation is expected to be settled in a period of over 12 months, provisions
are determined by discounting the expected future cash ows at a pre-tax rate that reects
current market assessments of the time value of money and, where appropriate, the risks
specic to the liability. A provision for warranties is recognized when the underlying products or
services are sold. The provision is based on historical warranty data and a weighting of all possible
outcomes against their associated probabilities. The increase in the provision due to passage of
time is recognized as interest expense.
Interest income
Interest income is recognized using the eective interest method. When a loan and receivable
is impaired, the Group reduces the carrying amount to its recoverable amount, being the
estimated future cash ow discounted at the original eective interest rate of the instrument,
and continues unwinding the discount as interest income. Interest income on impaired loan and
receivables is recognized using the original eective interest rate.
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Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
1 Material accounting policies
(continued)
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, who is responsible for
allocating resources and assessing performance of the operating segments, has been identied as the
Management Board that makes strategic decisions.
Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortized cost; any dierence between the proceeds (net of transaction costs)
and the redemption value is recognized in the consolidated statement of comprehensive income over
the period of the borrowings using the eective interest method. Borrowings are classied as current
liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12
months after the reporting date.
Government grants
Grants from the government are recognized within “Other operating income” at their fair value where
there is reasonable assurance that the grant will be received, and the Group will comply with all attached
conditions.
Government grants relating to costs are deferred and recognized over the period necessary to match
them with the costs that they are intended to compensate.
Grants relating to property, plant and equipment are recognized in prot or loss over the periods
and in the proportions in which depreciation on those assets is recognized. In statement of nancial
position, government grant is deducted in arriving at the carrying amount of the underlying asset and is
recognized in the prot or loss over the useful life of depreciable asset by way of a reduced depreciation
charge.
Dividend distribution
Dividend distribution to the shareholders is recognized as a liability in the consolidated nancial
statements in the period in which the dividends are approved by the shareholders.
Consolidation and goodwill
Subsidiaries are all entities (including structured entities) over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to aect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and are
de-consolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities
incurred and the equity interests issued by the Group. The consideration transferred includes the fair
value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related
costs are expensed as incurred. Identiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair values at the acquisition date. On
an acquisition-by-acquisition basis, the Group recognizes any non-controlling interest in the acquiree
either at fair value or at the non-controlling interest’s proportionate share of the recognized amounts
of identiable acquiree’s net assets.
Goodwill is initially measured as excess of the aggregate of the consideration transferred and the fair
value of non-controlling interest in the acquiree and acquisition-date fair value of any previous equity
interest in the acquiree over the fair value of the Group’s share of the identiable net assets acquired.
If this is lower than the fair value of the net assets of the subsidiary acquired in the case of a bargain
purchase, the dierence is recognized directly in the consolidated statement of comprehensive income.
Intercompany transactions, balances and unrealized gains on transactions between Group companies
are eliminated. Unrealized losses are also eliminated. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Group.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
1 Material accounting policies
(continued)
Leases
As a lessee
As a lessee, the Group leases property and vehicles. Under IFRS 16, the Group recognizes
right-of-use assets and lease liabilities for most of these leases – i.e. these leases are on-balance
sheet.
At commencement or on modication of a contract that contains a lease component, the Group
allocates the consideration in the contract to each lease component based on its relative
stand-alone price.
However, for leases of property the Group has elected not to separate non-lease components and
account for the lease and associated non-lease components as a single lease component.
The Group uses a number of practical expedients when applying IFRS 16 to leases. In particular, the
Group:
• does not recognize right-of-use assets and liabilities for leases for which the lease term ends
within 12 months of the date of initial applicationne;
• does not recognize right-of-use assets and liabilities for leases of low value assets; and
• excludes initial direct costs from the measurement of the right-of-use asset at the date of
initial application.
When measuring lease liabilities for leases that were classied as operating leases, the Group
discounted lease payments using its incremental borrowing rate, the weighted average rate
applied is 2.97% (2024: 2.81%).
As a lessor
The Group leases out its own property and the Group has classied these leases as operating
leases.
The Group sub-leases some of its properties. Under IFRS 16, the right-of-use assets recognized
from the head leases are presented in investment property and measured at fair value at that
date. The Group assessed the classication of the sub-lease contracts with reference to the
right-of-use asset rather than the underlying asset and concluded that they are operating leases
under IFRS 16.
The Group has applied IFRS 15 Revenue from Contracts with Customers to allocate consideration in
the contract to each lease and non-lease component.
2 Changes in accounting policies
There were no changes in accounting policies for the nancial year ending as at 31 December 2025
in comparison with prior reporting period.
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Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
3 New accounting standards and
interpretations
Adoption of new and amended International Financial Reporting Standards
Eective standards, amendments to standards and implementations –
adopted in 2025
Eective from 1 January 2025 the following standards, amendments or interpretations came into
force:
• Amendments to IAS 21 The Eects of Changes in Foreign Exchange Rates: Lack of Exchangeability
(issued on 15 August 2023); The amendments to IAS 21 introduce requirements for assessing
when a currency is exchangeable into another currency and when it is not. If a currency is
determined to be non-exchangeable, entities are required to estimate the spot exchange rate.
The amendments also introduce additional disclosure requirements. These changes apply to
annual reporting periods beginning on or after 1 January 2025, with early application permitted.
Adoption of these standards and amendments has not determined substantial eects on the
amounts recognized in balance sheet or income statement or impact on disclosure of accounting
policies.
Standards, amendments to standards and interpretations issued but not
yet eective
The standards, amendments to standards and interpretations that are issued, but not yet
eective, up to the date of issuance of the nancial statements are disclosed below. The Company
intends to adopt these standards, if applicable, when they become eective.
• Amendments to IFRS 9 Financial instruments and IFRS 7 Financial instruments: Disclosures:
Classication and measurement of Financial Instruments (issued on 30 May 2024; eective date 1
January 2026);
• Annual Improvements to IFRS Accounting Standards – Volume 11 (issued on 18 July 2024; eective
date 1 January 2026);
• Amendments to IFRS 9 Financial instruments and IFRS 7 Financial instruments: Disclosures:
Nature-dependent electricity contracts (issued on 18 December 2024; eective date 1 January
2026);
• IFRS 18 Presentation and Disclosure in Financial Statements (issued on 9 April 2024; eective date
1 January 2027);
• IFRS 19 Subsidiaries without Public Accountability: Disclosures (issued on 9 May 2024; eective
date 1 January 2027);
• Amendments to IAS 21 The Eects of Changes in Foreign Exchange Rates: Disclosures: Translation
to Hyperinationary Presentation Currency (issued on 13 November 2025; eective date 1
January 2027);
• Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates
and Joint Ventures: Disclosure: Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture (issued on 11 September 2014; eective date to be determined);
The Group is still in the process of assessing the impact of IFRS 18 and the related amendments,
particularly with respect to the structure of the Group’s statement of prot or loss, the
statement of cash-ows, other disclosures of MPMs and the grouping of nancial information.
Other amendments and standards are not expected to signicantly aect the Group’s nancial
statements.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
4 Critical accounting estimates and
judgements
Accounting estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. The Group makes estimates and assumptions concerning
the future. The resulting accounting estimates will, by denition, seldom equal the related
actual results. The estimates and assumptions that have a signicant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next nancial year are
discussed below.
(a) Impairment losses on loans and receivables
The Group reviews its receivables to assess impairment on a monthly basis. In determining
whether an impairment loss should be recorded in the consolidated statement of comprehensive
income, the Group makes judgements as to whether there is any observable data indicating that
there is a measurable decrease in the estimated future cash ows from a portfolio of loans and
receivables before the decrease can be identied with an individual loan or receivable in that
portfolio. This evidence may include observable data indicating that there has been an adverse
change in the payment status of borrowers in a group, or national or local economic conditions
that correlate with parameters relevant to assets in the Group.
(b) Derecognition of receivables with o-balance sheet nancing
From 2016, the Group entered into several new customer contracts in the foreign market. The
contracts include delivery of equipment and sale of services with 15% up-front payment while
remaining 85% have deferred payment terms up to 54 months.
The Group nanced the sale of equipment through a Supplier credit arrangement.
The arrangement includes: (i) matching cash receipts from customer with payments to the bank,
(ii) assignation of insurance policy to the bank, and (iii) ceding future cash receipts from the
customer to the bank through special purpose accounts secured by special purpose deposits
(Note 14).
By transferring to the bank its contractual right to receive the cash ows, the Group transferred
the nancial asset to the bank. In terms of derecognition criteria, the Group analyzed transfer of
risk and rewards of the receivable, specically related to credit risk and late payment risk.
The Credit risk is shifted from international customer to the risk from domestic insurance
company default, which is considered as signicant transfer in credit risk. The Group issued
guarantees to the nancing bank for risk of non-performance by the insurance company which
is disclosed in Note 22. The issued guarantee for non-performance of the insurance company is
recognized initially at fair value and subsequently at the higher of the unamortized balance of the
initial fair value and the best estimate of expenditure required to settle the obligation under the
guarantee.
Late payment risk was transferred based on the fact that the special purpose deposit covers the
late payment charges and/or history of payments with the customer do not historically evidence
late payment risk as substantial to the agreement.
Having transferred the right to cash ows and substantially all the risk and rewards relating
to 90% of receivables, the management concluded that it was appropriate to derecognize 90% of
the related receivables from the balance sheet. The remaining 10% of the receivables remain on
the balance sheet as long-term receivables from the customer (Note 14) and a 10% of the related
nancing liability to the bank is recorded as borrowings (Note 21).
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Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
4 Critical accounting estimates and
judgements (continued)
c) Revenue recognition
The Group uses estimates and judgments in determining the amount and timing of revenue under
IFRS 15, particularly when determining the transaction price and its allocation to performance
obligations identied under the contract.
Transaction price may consist of variable elements such as discounts and contract penalties.
Transaction price, including variable considerations, is estimated at the commencement of the
contract (and periodically thereafter). Judgment is used in the estimation process based on
historical experience with the type of business and customer.
IFRS 15 also requires revenue to be allocated to each performance obligations by reference
to their stand-alone selling prices. The Group considers that an adjusted market assessment
approach should be used to estimate stand-alone selling prices for its products and services
for the purposes of allocating transaction price. These estimates are comprised of prices set
for similar customer and circumstances, adjusted to reect appropriate prot margins for the
market. Estimates are used to determine discounts that relate specically to each performance
obligations, thus impacting their stand-alone selling prices.
The management applies judgment when assessing the customer’s ability and intention to pay in
a contract. The assessment is based on the latest customer credit standing and the customer’s
past payment history. This assessment may change during the contract execution, and if there is
evidence of deterioration in the customer’s ability or intention to pay, then under IFRS 15 no further
revenue shall be recognized until the collectability criteria is met. Conversely, this assessment may
also change favorably over time, upon which revenue shall now be recognized on a contract that did
not initially meet the collectability criteria.
Revenue for standard products shall be recognized when control over the equipment is
transferred to the customer at a point in time. This assessment shall be viewed from a customer’s
perspective considering indicators such as transfer of titles and risks, customer acceptance,
physical possession, and billing rights.
Control of an asset therefore refers to the ability to direct use of and obtain substantially all the
remaining benets from the asset. Control includes the ability to prevent other entities from using
and obtaining the benets from an asset. The benets of an asset are the potential cash ows
(inows or savings in outows) that can be obtained directly or indirectly.
Judgment may be applied in determining whether risk and rewards have been transferred to the
customer and whether the customer has accepted the products. In a sale of software license,
judgment may also be applied to determine when the software is made available to the customer by
considering when they can direct the use of, and obtain substantially all the benets of, the license.
Often all indicators of transfer of control are assessed together and an overall judgment formed
as to when transfer of control has occurred in a customer contract.
Revenue for customized solutions shall be recognized over time if progress of completion can be
reliably measured and enforceable right to payment exists over the duration of the contract. The
progress of completion is estimated by reference to the output delivered such as achievement
of contract milestones and customer acceptance. Judgments are applied when determining the
appropriate revenue milestones that best reect the progress of completion and are aligned with
key acceptance stages within the contract.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
5 Sales revenue
2025 2024
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
At a point in
time
Over time
At a point in
time
Over
time
Sales revenue from
products
53,292 41,684 11,608 59,475 49,478 9,997
Sales revenue from
services
185,298 166,079 19,219 189,998 172,955 17,043
238,590 207,763 30,827 249,473 222,433 27,040
Analysis of revenue by category:
6 Segment reporting
The Group has determined the operating segments based on the reports reviewed by the
Management Board that are used to make strategic decisions. The Management Board assesses
the performance of the operating segments based on a measure of adjusted Operating prot. The
measurement basis excludes the eects of administration expenses.
When determining the operating segments, the Group has looked at which market and to what
type of customers the Group’s products are aimed, and through what distribution channels they
are sold, as well as to commonality regarding technology, research and development.
To best reect the business focus and to facilitate comparability with the Ericsson Group, four
operating segments are reported:
• Networks include radio and transport solutions with supporting services, based on industry
standards and oered via scalable modular platforms. The portfolio enables customers to
evolve their telecom networks across generations to 5G
• Digital Services include products and services providing solutions for our Telecom and Industry
& Society customers’ digital transformation journeys across the support systems BSS and
OSS, Telecom Core, and IT Cloud domains through a combination of products, technology and
expertise in networks, software, cloud, and business processes.
• Managed Services are oered in three main areas: Networks, IT, and Network Design &
Optimization.
• Other includes products and services that enable content owners, broadcasters, TV
service providers and network operators to eciently deliver, manage and monetize new
TV experiences. In addition, segment Other includes iconectiv and emerging business such as
Internet of Things and Unied Delivery Network (UDN).
The Management Board does not monitor assets and liabilities by segments and therefore this
information is not disclosed.
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6 Segment reporting (continued)
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
Revenues determined based on the geographic location of customers are disclosed in this note. The
Group’s assets are located in Croatia, Bosnia and Herzegovina and Kosovo.
2025 2024
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 ‘EUR ‘000 EUR ‘000
At a point in
time
Over time
At a point in
time
Over
time
Sales revenue in
domestic market
64,676 42,885 21,791 66,370 48,132 18,238
Sales revenue to
Ericsson
141,308 141,308 - 138,249 138,249 -
Sales revenue in Bosnia
and Herzegovina,
Montenegro and Kosovo
26,248 19,757 6,491 37,799 32,097 5,702
Other export sales
revenue
6,358 3,813 2,545 7,055 3,955 3,100
238,590 207,763 30,827 249,473 222,433 27,040
Networks Digital services
Managed
services
Other Unallocated Total
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
Sales revenue 157,917 153,306 75,912 92,567 4,265 3,093 496 507 - - 238,590 249,473
Timing of
revenue
recognition:
At a point in time 145,665 141,691 57,337 77,142 4,265 3,093 496 507 - - 222,433 222,433
Over time 12,252 11,615 18,575 15,8425 - - - - - - 27,040 27,040
Operating prot 19,827 18,434 8,191 10,055 (427) (484) 20 20 (6,706) (6,376) 20,905 22,144
Finance income/
(costs), net
591 1,104
Prot before
tax
21,496 23,248
Income tax (3,748) (7,651)
Prot for the
year
17,748 15,597
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
6 Segment reporting (continued)
Comparatively from 2025, sales are monitored by the following segments:
- Digital Society
The Digital Society segment develops advanced ICT solutions that enable digital transformation
across various industries and areas of human activity. We are focused on creating high-tech sys-
tems for key social spheres – healthcare, transport, public administration, public and national secu-
rity, land registry and infrastructure management, as well as solutions for sustainable and smart
energy management and business digitalization. Our innovative ICT solutions, based on technical
expertise and deep domain knowledge, enhance processes through automation, data-driven optimi-
zation, cost reduction, and improved user experience. Through our platform oerings, we lead the
digital transformation of selected verticals such as e-health, land and public administration, intelli-
gent transportation systems and national security positioning systems.
- Telecom
We design and implement end-to-end solutions for radio, transmission and core networks, business
support systems and other specialized solutions such as media and solutions for private networks.
We provide telecom operators with planning, design, engineering, construction, monitoring and
maintenance services for xed and mobile telecommunications infrastructure, along with network
integration and optimization, as well as professional support and consulting. Our high-performance,
programmable telecommunications solutions, combined with top expertise in service delivery, en-
able communication operators to build modern, reliable and scalable networks.
- R&D and services
We develop and deliver innovative and reliable software products and services. Our service delivery
ensures a superior network user experience thanks to advanced technical expertise, integration
capabilities, data analytics, automation, optimization and AI- driven operations. The technical exper-
tise and competencies of our team ensure the ecient development of innovative software solu-
tions with high added value.
Digital Society R&D and SErvices Telecom Total
2025 2024 2025 2024 2025 2024 2025 2024
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
Sales revenue 26,355 31,179 143,391 140,694 68,864 77,600 238,590 249,473
Timing of revenue
recognition:
At a point in time 13,056 20,823 143,391 140,693 51,316 60,917 207,763 222.433
Over time 13,279 10,357 - - 17,548 16,683 30,827 27,040
Operating prot 912 590 13,026 12,366 6,967 9,188 20,905 22,144
Finance income/
(expense), net
591 1,104
Prot before tax 21,496 23,248
Income tax (3,748) (7,651)
Prot for the year 17,748 15,597
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7 Expenses by nature
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
Cost of sales, selling expenses and administrative expenses consist of the following expenses by
nature:
2025 2024
EUR ‘000 EUR ‘000
Changes in contract work in progress (Note 15) (311) 4,222
Material and external services (1) 74,202 84,979
Personnel expenses (Note 8) 143,634 138,721
Depreciation and amortization (Notes 12, 13, 28) 5,202 5,277
Value Adjustments 151 -
222,878 233,199
(1) Including fees to auditors of EUR 110 thousand (2024: EUR 98 thousand). Fees to auditors relate to
statutory audit services amounted to EUR 83 thousand (2024: EUR 80 thousand), ESG limited review
amounted to EUR 27 thousand (2024: EUR 18 thousand) while fees related to other services amounted
to EUR 0 thousand (2024: EUR 0 thousand).
Other operating income
Other operating income consists of rent income in total amount of EUR 4,146 thousand (2024: EUR
5,335 thousand) and other in total amount of EUR 1,062 thousand (2024: EUR 574 thousand).
8 Personnel expenses
2025 2024
EUR ‘000 EUR ‘000
Net salaries 79,391 78,694
Taxes and contributions 49,848 49,112
Other payroll-related costs 13,397 10,457
Equity-settled transactions (Note 23 (b)) 997 458
143,634 138,721
Personnel expenses include EUR 21,734 thousand (2024: EUR 21,126 thousand) of dened pension
contributions paid or payable into obligatory pension plans. Contributions are calculated as a
percentage of employees’ gross salaries.
Other payroll-related costs mainly relate to termination benets in the amount of EUR 174 thousand
(2024: EUR 178 thousand), and to transportation expenses and vacation accrual cost.
As at 31 December 2025, the total number of employees was 2,979 (2024: 2,913).
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
9 Finance income/(costs), net
2025 2024
EUR ‘000 EUR ‘000
Interest income 986 1,718
Net change in fair value of nancial assets at fair value through
prot and loss
88 161
Amortisation of discount - 2
Finance income 1,074 1,881
Interest expense (453) (759)
Net foreign exchange loss (30) (18)
Finance expense (483) (777)
Finance income/(expense), net 591 1,104
10 Income tax expense
Income tax has been calculated on the taxable income at statutory tax rates applicable to prots
in the respective countries. Income tax expense recognized in the consolidated statement of
comprehensive income comprises:
2025 2024
EUR ‘000 EUR ‘000
Current income tax expense (3,846) (7,803)
Total deferred tax income/(expense) 98 152
Total income tax expense (3,748) (7,651)
Deferred tax from tax losses
As at 31 December 2025 the Group did not recognize deferred income tax assets of EUR 41 thousand
(2024: EUR 96 thousand) in respect of cumulative tax losses amounting to EUR 423 thousand (2024:
EUR 535 thousand) that can be carried forward against future taxable income.
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10 Income tax expense (continued)
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
Deferred tax from tax losses (continued)
A tax loss may be carried forward for ve years subsequent to the year in which it was incurred.
2025 2024
EUR ‘000 EUR ‘000
Tax loss for 2022 – expires 31 December 2027 76 76
Tax loss for 2024 – expires 31 December 2029 347 459
423 535
Eective tax rate reconciliation
The tax on the prot before tax diers from the theoretical amount that would arise using the
weighted average tax rate applicable to prots of the consolidated entities as follows:
2025 2024
EUR ‘000 EUR ‘000
Prot before tax 21,496 23,248
Tax calculated at domestic tax rates applicable to prots in the
respective countries
3,864 4,139
Tax eects of:
Permanent non-deductible expenses 22 27
Eects of temporary dierences 51 152
Tax incentives (95) (82)
Tax losses utilized (94) (14)
CIT from previous years - 3.429
Tax charge 3,748 7,651
Eective tax rate 17.4% 32.9%
Tax incentives totaling EUR 95 thousand (2024: EUR 82 thousand) include tax allowances for certain
expenditure, as employment and education and training, as dened by Croatian tax legislation. The
underlying expenditure is included in cost of sales.
The Croatian Income Tax Act is subject to dierent interpretations and changes in respect of
certain expenses which reduce the tax base. The Management Board’s interpretation of the
law relating to these transactions and activities of the Group may be disputed by the relevant
authorities. The Tax Authority has taken a dierent view in interpreting the laws and judgments, and
some of the transactions and activities that have not been disputed in the past are disputed during
2024 resulting in one-time tax expense from the previous years.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
10 Income tax expense (continued)
Deferred tax assets
EUR ‘000
As at 1 January 2024 2,506
Tax credited to the Income statement 551
Tax charged to the Income statement (399)
As at 31 December 2024 2,658
As at 1 January 2025 2,658
Tax credited to the Income statement 731
Tax charged to the Income statement (633)
As at 31 December 2025 2,756
11 Earnings per share
2025 2024
Prot for the year (EUR ‘000) 17,748 15,597
Weighted Average Number of Shares Outstanding at the year-end 1,327,594 1,325,756
Earnings per share (EUR) 13.37 11.76
Basic and fully diluted earnings per share are the same since the Parent Company does not have
any dilutive potential ordinary shares
Deferred tax from other temporary dierences
The Group recognized deferred tax assets in the amount of EUR 2,756 thousand (2024: EUR 2,658
thousand) relating to temporary dierences arising from:
– Accrued interest expenses
– Impairment of receivables
– Accrued expenses from contracts
– Warranty provisions
– Provisions for jubilee awards and retirement
– Right of use asset and lease liabilities
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12 Property, plant and equipment
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
Land and
buildings
Plant and
equipment
Asset under
construction
Other Total
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
As at 1 January 2024
Cost or valuation 27,637 29,768 79 26 57,510
Accumulated depreciation 18,829 (23,929) - (23) 42,781
Net book amount 8,808 5,839 79 3 14,729
Year ended 31 December 2024
Opening net book amount 8,808 5,839 79 3 14,729
Transfer of asset under construction 21 36 (57) - -
Additions 12 1,885 1,377 - 3,274
Disposals - (333) - - (333)
Depreciation charge (542) (2,232) - - (2,774)
Closing net book amount 8,299 5,195 1,399 3 14,896
As at 31 December 2024
Cost or valuation 27,670 27,980 1,399 26 57,075
Accumulated depreciation (19,371) (22,785) - (23) (42,179)
Net book amount 8,299 5,195 1,399 3 14,896
Year ended 31 December 2025
Opening net book amount 8,299 5,195 1,399 3 14,896
Transfer of asset under construction - 1,377 (1,377) - -
Additions - 916 874 - 1,790
Disposals - (16) - - (16)
Depreciation charge (399) (2,207) - - (2,606)
Closing net book amount 7,900 5,265 896 3 14,064
As at 31 December 2025
Cost or valuation 27,670 28,089 896 26 56,681
Accumulated depreciation (19,770) (22,824) - (23) (42,617)
Net book amount 7,900 5,265 896 3 14,064
As at 31 December 2025, the Group had contracts totaling EUR 141 thousand (2024: EUR 924 thousand)
related to future equipment purchases.
Asset under construction mostly relates to building energy reconstruction in Krapinska 45, Zagreb.
The Group acts as a lessor under operating leases, mainly in respect of land and buildings. Property
leased to others with a carrying value of EUR 446 thousand (2024: EUR 462 thousand) is included
within land and buildings. These assets are depreciated at the same depreciation rates as other
buildings. Subsequent renewals are negotiated with the lessee. No contingent rents are charged.
Portions of the property which is held for rental could not be sold separately or leased out
separately under nance lease. Consequently, the IAS 40 criteria for separate investment property
recognition are not met.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
13 Intangible assets
Application
software
Qwn
developed
software
Assets under
constructioni
Total
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
As at 1 January 2024
Cost or valuation 825 - 346 1,171
Accumulated amortization (786) - - (786)
Net book amount 39 - 346 385
Year ended 31 December 2024
Opening net book amount 39 - 346 385
Transfer of asset under construction - 343 (343) -
Additions from internal development,
Note 20 (c)
- 18 812 830
Additions 15 - - 15
Amortization charge (40) (40) - (80)
Closing net book amount 14 321 815 1,150
As at 31 December 2024
Cost or valuation 575 361 815 1,751
Accumulated amortization (561) (40) - (601)
Net book amount 14 321 815 1,150
Year ended 31 December 2025
Opening net book amount 14 321 815 1,150
Transfer of asset under construction - - 1,246 1,246
Additions from internal development,
Note 20 (c)
- (152) - (152)
Disposals (5) (113) - (118)
Amortization charge 9 56 2,061 2,126
As at 31 December 2025
Cost or valuation 575 101 2,061 2,737
Accumulated amortization (566) (45) - (611)
Net book amount 9 56 2,061 2,126
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14 Loans and receivables
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
2025 2024
EUR ‘000 EUR ‘000
Deposits with nancial institutions 82 852
Non-current receivables from foreign customers 482 246
Loans given, Note 4 (b) - 66
Receivables for sold apartments 98 103
Total loans and receivables 662 1,267
Impairment allowance on loans and receivables - -
662 1,267
Deposits with nancial institutions in the amount of EUR nil (2024: EUR 1,422 thousand) are used as
a collateral for Supplier credit arrangement and performance guarantees disclosed in Note 4 (b),
with interest rate from 0.10% to 0.15%.
The rest of the deposits with nancial institutions of EUR 82 thousand (2024: EUR 120 thousand)
are placed as guarantee deposits for housing loans provided to the employees with a remaining
maturity of over three years.
Loans and receivables from customers are partially secured with bank guarantees and letters of
credit. The current portion of the non-current receivables is classied under current assets.
Receivables for sold apartments are linked to the counter value of euro, repayments are made
by deduction from monthly salary and the loans are secured with collateral on the house or
apartment. Receivables for sold apartments and housing loans provided to a limited number of
employees bear xed interest rates of up to 5% per annum.
2025 2024
Due EUR ‘000 EUR ‘000
2026 - -
2027 482 312
482 312
Non-current portion of foreign and domestic loans and receivables from customers
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
15 Inventories
2025 2024
EUR ‘000 EUR ‘000
Raw materials 5,467 4,620
Contract work in progress 5,340 4,947
10,807 9,567
Slow-moving or obsolete inventories have been written down to their estimated realizable value
through an impairment allowance.
In 2025, there was no impairment of inventory (2024: EUR 75 thousand) that would be included in the
cost of goods sold in the consolidated statement of comprehensive income.
16 Trade receivables
2025 2024
EUR ‘000 EUR ‘000
Foreign trade receivables 10,367 8,896
Current portion of non-current foreign receivables 1,269 986
Total current foreign receivables 11,636 9,882
Domestic trade receivables 13,565 15,299
Impairment allowance on receivables (204) (221)
24,997 24,960
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16 Trade receivables (continued)
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
2025 2024
EUR ‘000 EUR ‘000
As at 1 January 724 629
Impact of discounting non-current receivables - (1)
Receivables written o during the year as uncollectible (578) (98)
Impairment on receivables/(release of impairment on receivables) 432 194
As at 31 December (1) 578 724
(1) Including impairment provision for receivables from related parties of 298 thousand (2024: EUR
301 thousand).
Movements in impairment allowance on loans and receivables were as follows:
17 Other receivables
2025 2024
EUR ‘000 EUR ‘000
Advances given 882 2,780
Deposits 732 690
Net VAT receivables 420 226
Receivables for existing customer nancing agreements (note 4b) 11 840
Other receivables 77 126
2,122 4,662
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
18 Financial assets at fair value
through prot or loss
2025 2024
EUR ‘000 EUR ‘000
Financial assets at fair value through prot or loss
- Equity securities 110 112
- Investment in open-ended investment funds 4,619 4,281
4,729 4,393
19 Cash and cash equivalents
2025 2024
EUR ‘000 EUR ‘000
Cash and demand deposits 47,321 58,878
Impairment loss (Note 30 (d)) (128) (145)
47,193 58,733
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20 Equity
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
(b) Treasury shares
These shares are initially held as “treasury shares” and are regularly granted to key management
and other employees as a part of the share-based program established in 2004, as described in
Note 23 (b). Shares transferred to employees are recognized on a rst-in-rst-out basis.
Movements in treasury shares are as follows:
(a) Share capital
As at 31 December 2025, the share capital is represented by 1,331,650 (2024: 1,331,650) of authorized,
issued and fully paid ordinary shares, with a total registered value of EUR 17,674 thousand (2024: EUR
17,674 thousand). Holders of the ordinary shares are entitled to receive dividends as declared at
the Annual General Meeting and are entitled to one vote per share at the Annual General Meeting.
The shareholders as at 31 December are:
Number of
shares
% held
Number of
shares
% held
2025 2024
Telefonaktiebolaget LM
Ericsson
653,473 49.07 653.473 49.07
Other shareholders 659,790 49.55 672.449 50.50
Treasury shares 18,387 1.38 5.728 0.43
1,331,650 100.00 1,331,650 100.00
Number of
shares
Number of
shares
2025 2024
As at 1 January 5,728 5,886
Purchased during the year 15,574 3,309
Distributed during the year (2,915) (3,467)
As at 31 December 18,387 5,728
(c) Legal and other reserves
A legal reserve in the amount of 5% of total share capital was formed during previous periods by
appropriation of 5% of net prot per annum up to a cap of 5% of share capital. The legal reserve
may be used to cover losses if the losses are not covered by current net prot or if other
reserves are not available. The Group recorded the required level of legal reserves in 2000 and no
further allocation to legal reserves is required. Legal reserves up to 5% of total share capital are
not distributable.
Pursuant to the Accounting Act, the reserves for unwritten value of development costs are
recognized for internally generated intangible asset in the amount of EUR 2,117 thousand (2024: EUR
1,136 thousand).
(d) Reserve for own shares
Reserve for own shares is separated by the decision of Annual General Meeting.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
20 Equity (continued)
2025 2024
EUR ‘000 EUR ‘000
EUR 15.00 per share for 2023 - 19,880
EUR 10.54 per share for 2024 13,976 -
Prior year dividend payout 161 17
14,137 19,897
(e) Dividends
Dividends payable are not accounted for until they have been ratied at the Annual General Meeting
of shareholders. On 26 June 2025, the Annual General Meeting approved a regular dividend of EUR
10.54 per share and an extraordinary dividend of EUR 5 per share in respect of 2024, totaling EUR
13,976 thousand.
Cash dividends authorized and paid for previous years were as follows:
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21 Borrowings
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
2025 2024
EUR ‘000 EUR ‘000
Loans - -
Finance arrangements for supplier’ nancing 7,403 -
Borrowings, Note 4 (b) 3 15
Total liabilities for borrowings 7,406 15
Short term portion 7,403 -
Long term portion 3 15
Changes in liabilities from nancing activities Borrowings
EUR ‘000
Year ended 31 December 2024
Opening net book amount 583
Cash transactions
Repayment of loans and borrowings (1,256)
Non-cash transactions
Overtake of liability towards bank 799
Release of obligations (Note 4(b)) (111)
Closing net book amount 15
Year ended 31 December 2025
Opening net book amount 15
Cash transactions
Repayment of loans and borrowings (7,275)
Non-cash transactions
Finance arrangements for supplier’ nancing 14,666
Overtake of liability towards bank 89
Release of obligations (Note 4(b)) (89)
Closing net book amount 7,406
In 2025 there were no new loans taken, and there were no repayments of obligations under previous
loans. The Company uses nancial arrangements with banks to ensure current liquidity and manage
cash ow (paying invoices to suppliers on the due date, with extended payment deadlines to the
bank), which results in the presented loan item.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
22 Other non-current liabilitiesy
2025 2024
EUR ‘000 EUR ‘000
Other non-current liabilities, Note 4 (b) - 1
- 1
23 Employee benets
a) Long-term service benets
The Group does not operate any pension schemes or other retirement benet schemes for
the benet of any of its employees or management. In respect of all the personnel, such social
payments as required by the authorities are paid. These contributions form the basis of social
benets payable out of the Croatian Pension Insurance Institute to the Croatian employees upon
their retirement. Additionally, in 2001 the Parent Company signed an Annex to the Union Agreement
based on which employees are entitled to a benet upon early retirement.
However, the Group pays a one-time benet amounting to EUR 1,061.78 for each employee who
retires. Additionally, the Group pays jubilee awards in respect of each 5 years of service of
an employee, starting from the 10th year and ending in the 40th year. The principal actuarial
assumptions used to determine retirement and jubilee obligations as at 31 December 2025 were a
2.06% discount rate (2024: 1.92%) and a 5.74% (2024: 5.97%) rate of average employment turnover.
Movements in long-term service benets were as follows:
Jubilee
awards
Retirement Total
Jubilee
awards
Retirement Total
2025 2024
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
As at 1 January 852 195 1,047 820 123 943
Obligation created
during the year
367 523 890 176 82 258
Obligation fullled
during the year
(231) (6) (237) (144) (10) (154)
Obligation reversed
during the year
- - - - - -
As at 31 December 988 712 1,700 852 195 1,047
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23 Employee benets (continued)
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
(b) Share-based payments
In 2004, the Parent Company established its Loyalty program, a share-based scheme under key
employees are entitled to receive the Parent Company´s shares conditional on the employee
completing certain years of service (the vesting period) from the grant date.
The treasury shares are distributed to eligible employees upon ratication at the Annual General
Meeting.
In 2025 the Parent Company continued its Loyalty program and granted additional shares to eligible
employees under vesting condition related to years of service with the Parent Company.
Movements in shares under the Award and Loyalty programs are as follows:
2025 2024
Number of shares Number of shares
As at 1 January 2,830 5,625
Granted 19,300 797
Exercised (2,915) (3,467)
Expired (35) (125)
As at 31 December 19,180 2,830
Vesting conditions for shares granted under Loyalty program are one to four years of service.
The fair value of service received in return for shares granted is measured by reference to the
observable market price of shares at the grant date.
During 2025, the Group had EUR 997 thousand expenses (2024: EUR 458 thousand) in respect of share-
based payments, which are included in personnel expenses as disclosed in Note 8.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
24 Trade and other payables
2025 2024
EUR ‘000 EUR ‘000
Trade payables 4,428 14,980
Liabilities to employees 15,378 18,136
VAT liabilities 2,420 2,884
Other current liabilities 4,235 3,656
26,461 39,656
The Group participates in supplier nance arrangements under which its suppliers may elect to
receive early payment of their invoices from a bank as well as arrangements used for optimizing
Group’s cash ows. Under both types of the arrangements, the bank agrees to pay amounts due to
participating suppliers in respect of invoices owed by the Group and the Group repays the bank at
a later date. The purpose of early payment arrangement is to provide the willing suppliers with the
benet of early payment and the purpose of arrangements used for optimizing Group’s cash ows
is deferring the payment to bank after the initial supplier invoice due date which supports ecient
cash ow management of the Group. Share of payable turnover that is included in any sort of
supplier nance arrangement is 14% in value.
The Group has derecognized the original trade payables relating to the arrangements in favor of
bank when entering into the arrangements since the original liability was replaced with liability
towards bank.
From the Group’s perspective, the arrangement does not extend payment terms towards
suppliers participating beyond the normal terms agreed with other suppliers that are not
participating. The Group does not incur any additional interest towards the bank on the amounts
due to the suppliers that are participating in early payment arrangements. For the part of
arrangements related to cash ow management, the Group pays interest towards the bank for
the arrangements that are under prolonged due date. The Group therefore includes the amounts
subject to the arrangements within trade payables because the nature and function of these
payables remain the same.
All payables under the arrangement are classied as current as at 31 December 2025 and 2024.
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Warranty
reserve
Termination
benets
Other
reserve
Total
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
As at 1 January 2024
172 508 902 1,583
Additional provisions 87 353 - 440
Unused provisions reversed - - (40) (40)
Provisions used during the year (7) (600) (149) (756)
As at 31 December 2024
252 261 713 1,227
As at 1 January 2025
252 261 713 1,227
Additional provisions 25 1,867 250 2,142
Unused provisions reversed (1) - - (1)
Provisions used during the year (2) (1,209) (79) (1,291)
As at 31 December 2025
274 919 884 2,077
25 Provisions
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
Movements in provisions were as follows:
The warranty reserve is established to cover the expected warranty claims on products sold
during the year. Reversal of warranty reserves relates to expired warranties.
26 Accrued charges and deferred
revenue
2025 2024
EUR ‘000 EUR ‘000
Deferred revenue 714 723
Accrued charges for unused holidays 4,579 4,410
Accrued charges in respect of service contracts 6,721 7,392
Other accrued charges 2,654 3,137
14,668 15,662
Deferred revenue represents mainly government grants relating to costs which are deferred and
recognized in income statement at the same time when the related costs are recognized.
Accrued charges in respect of service contracts mainly represent costs incurred for which no
invoice has been received from supplier or other external contractor at the balance sheet date.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
27 Contract liabilities
2025 2024
EUR ‘000 EUR ‘000
Contract liabilities – advances from customers 8,531 9,295
Contract liabilities – deferred revenue 12,891 11,494
Total current contract liabilities 21,422 20,789
As at 31 December 2025 the Group recognized EUR 21,422 thousand (2024: EUR 20,789 thousand)
of contract liabilities in respect of the contracts related to modernization of mobile and xed
network, project-related services and support activities and other.
The following table presents information on unsatised performance obligations resulting from
long-term contracts with customers.
The Group has recognized the following liabilities arising from contracts with customers:
2025 2024
EUR ‘000 EUR ‘000
Aggregate amount of the transaction price allocated to long-
term contracts that are fully unsatised
8,859 7,371
Aggregate amount of the transaction price allocated to long-
term contracts that are partially unsatised
75,899 67,223
84,758 74,594
The Group expects to recognize approximately 37% of the transaction price allocated to the
remaining performance obligations as revenue in nancial year 2026, 25% as revenue in nancial
year 2027, 19% as revenues in nancial year 2028, 14% as revenues in nancial year 2029 and 5% as
revenues in nancial year 2030.
All other contracts are for periods of one year or less or are billed based on time incurred.
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28 Leases
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
(a) Leases as lessee
The Group leases warehouse, oce premises and parking lots. The leases typically run for a period
of 5 years, with an option to renew the lease after that date. For certain leases, the Group is
restricted from entering into any sub-lease arrangements.
The warehouse, oce premises and parking lots were entered many years ago as combined leases
of land and buildings.
The Group leases vehicles under a number of leases. The leases typically run for a period of 3 to 5
years.
Information about leases for which the Group is a lessee is presented below.
2025 2024
EUR ‘000 EUR ‘000
Balance as at 1 January 14,258 15,028
Depreciation charge for the year (2,478) (2,422)
Increase of right-of-use assets 1,263 1,683
Modications (2) (2)
Derecognition of RoU assets (29) (30)
Balance as at 31 December 13,012 14,258
Amounts recognized in Statement of comprehensive income
Leases under IFRS 16 2025 2024
EUR ‘000 EUR ‘000
Interest on lease liabilities 421 421
Income from sub-leasing 85 184
Expenses relating to short-term leases 126 155
Right-of-use assets
Right-of-use assets related to leased properties that do not meet the denition of investment
property are presented as property, plant and equipment.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
28 Leases (continued)
2025 2024
EUR ‘000 EUR ‘000
Balance as at 1 January 14,723 15,307
Repaid lease liability (2,249) (2,097)
Additions to lease liability 1,263 1,544
Modications (2) (2)
Derecognition of lease (29) (30)
Interest expense 421 421
Interest paid (421) (421)
Balance as at 31 December 13,706 14,723
(b) Leases as lessor
The Group leases out its property consisting of commercial properties. All leases are classied as
operating leases from a lessor perspective.
Operating lease
The Group leases out its owned commercial properties. The Group has classied these leases as
operating leases, because they do not transfer substantially all of the risks and rewards incidental
to the ownership of the assets.
Rental income recognized by the Group during 2025 was EUR 4,146 thousand (2024: EUR 5,335
thousand).
The following table sets out a maturity analysis of lease payments to be received after the
reporting date.
(a) Leases as lessee (continued)
Extension options
Some property leases contain extension options exercisable by the Group up to one year before
the end of the non-cancellable contract period. Where practicable, the Group seeks to include
extension options in new leases to provide operational exibility.
The Group assesses at lease commencement date whether it is reasonably certain to exercise the
extension options. The Group reassesses whether it is reasonably certain to exercise the options
if there is a signicant event or signicant changes in circumstances within its control.
The following table sets out a movement in lease liability:
Operating leases under IFRS 16 2025 2024
EUR ‘000 EUR ‘000
Less than one year 2,045 1,993
Between one and three years 1,953 1,663
Between three and ve years 1,525 1,267
More than ve years 1,462 2,005
Total 6,985 6,927
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29 Balances and transactions with
related parties
For the purposes of these consolidated nancial statements, parties are generally considered to
be related if one party has the ability to control the other party, is under common control, or can
exercise signicant inuence over the other party in making nancial and operational decisions. In
considering each possible related party relationship, attention is directed to the substance of the
relationship, not merely the legal form.
The Group is a related party to the Ericsson Group via the 49.07% (2024: 49.07%) shareholding by
Telefonaktiebolaget LM Ericsson, which is also the ultimate parent of the Ericsson Group.
The Group has related-party relationships with Telefonaktiebolaget LM Ericsson, Ericsson Group
subsidiaries and associates, the Supervisory Board, the Management Board and other executive
management.
(a) Key transactions with the related parties
Major transactions with the Ericsson Group companies may be summarized as follows:
Telefonaktiebolaget
LM Ericsson.
Other Ericsson
Group consolidated
companies
Total
2025 2024 2025 2024 2025 2024
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
Sales of goods and
services
Sales revenue - - 141,308 138,249 141,308 138,249
Other income - - - - - -
- - 141,308 138,249 141,308 138,249
Purchases of goods and
services
Licenses 241 18 1,458 2,346 1,699 2,364
Cost of sales - - 36,555 41,150 36,555 41,150
241 18 38,013 43,496 38,254 43,514
The sales of goods and services transactions have been directly negotiated between the involved
parties and agreed on an individual basis. The Group pays: (i) license fees on sales of services and
products, (ii) corporate trademark licenses, (iii) support services, (iv) R&D tools and (v) IS/IT fee. The
license fee is paid as a percentage of sales of services and sales of products.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued) Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
29 Balances and transactions with
related parties (continued)
2025 2024
EUR ‘000 EUR ‘000
Salaries and other short-term employee benets 4,147 3,347
4,147 3,347
The members of the executive management and the Supervisory Board held 2,164 ordinary shares
at the year-end (2024: 4,053 shares).
In addition, the Group paid remuneration totaling EUR 112 thousand (2024: EUR 116 thousand) to the
Supervisory Board and Audit Committee members during 2025.
(c) Year-end balances arising from sales and purchases of goods and
services
Year-end balances arising from key transactions with Ericsson Group companies may be
summarized as follows:
(b) Key management compensation
The key management includes the executive management listed under the Parent Company prole,
comprising the Management Board member and the directors of the main organizational units,
which on the Group level also includes the directors of daughter companies.
Trade receivable Trade payable
2025 2024 2025 2024
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
Telefonaktiebolaget LM Ericsson (LME),
largest individual shareholder
- - 69 -
Other Ericsson Group companies 44,149 39,458 13,075 16,428
44,149 39,458 13,144 16,428
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Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
30 Financial risk management
The Group’s activities expose it to a variety of nancial risks: market risk (including currency risk,
interest rate risk, and price risk), credit risk and liquidity risk. Exposure to currency, interest rate
and credit risk arises in the normal course of the Group’s business. Risk management is carried out
by a treasury department and its principal role is to actively manage investment of excess liquidity
as well as nancial assets and liabilities, and to manage and control nancial risk exposures. The
Group also has a customer nance function with the main objective to nd suitable third-party
nancing solutions for customers and to minimize recourse to the Group. Risk management policies
that relate to nancial instruments can be summarized as follows:
(a) Currency risk
Currency risk is the risk that the value of a nancial instrument will uctuate due to changes
in foreign exchange rates. The Group is exposed to US dollars as a substantial proportion of
receivables and foreign revenues are denominated in this currency. Risk management relies on
attempts to match, as much as possible, revenues in each currency with the same currency
expenditure. The Group may enter into foreign currency forward contracts to hedge economically
its exposure to currency risk arising on operating cash ows.
As at 31 December 2025, if the US dollar had weakened/strengthened by 1% (2024: 1%) against the
Euro, with all other variables held constant, the net result after tax for the reporting period
would have been EUR 5 thousand higher/lower (2024: EUR 1 thousand), mainly as a result of foreign
exchange losses/gains on translation of cash, cash equivalents, deposits, trade payables, customer
receivables and customer nancing denominated in US dollar.
Other currencies to which the Group is exposed are: SEK, BAM, USD.
The Group continues to focus on securing natural hedges and active currency management and to
minimize impacts from currency moves. The Group’s exposure to foreign currencies is shown in the
table below.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
30 Financial risk management
(continued)
(a) Currency risk (continued)
The tables below present the currency analysis and the resulting gap.
2025 USD
Other
currency
Total
foreign
currencies
EUR Total
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
Loans and receivables
- - - 662 662
Trade and other receivables 351 1,907 2,258 70,542 72,800
Financial assets at fair value
through prot or loss
- 257 257 4,472 4,729
Cash and cash equivalents 239 2,969 3,208 43,985 47,193
590 5,133 5,723 119,661 125,384
Borrowings and lease liabilities - (55) (55) (21,057) (21,112)
Trade and other payables
(14) (372) (386) (47,754) (48,140)
(14) (427) (441) (68,811) (69,252)
Currency gap 576 4,706 5,282 50,850 56,132
2024 USD
Other
currency
Total foreign
currencies
EUR Total
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
Loans and receivables
- - - 1,267 1,267
Trade and other receivables 339 1,372 1,711 68,502 70,213
Financial assets at fair value
through prot or loss
- - - 4,393 4,393
Cash and cash equivalents 1 2,535 2,536 56,197 58,733
- 3,907 4,247 130,359 134,606
Borrowings and lease liabilities - (101) (101) (14,637) (14,738)
Trade and other payables
(510) (153) (663) (66,840) (67,503)
(510) (254) (764) (81,477) (82,241)
Currency gap (170) 3,653 3,483 48,882 52,365
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Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
30 Financial risk management
(continued)
(b) Interest rate risk
Interest rate risk is the risk that the value of a nancial instrument will uctuate due to changes
in market interest rates. As the Group mainly has its customer nancing at a xed interest rate
and only a small portion of customer nancing is aected by possible changes in market interest
rates, the risk of uctuating market interest rates is considered low. The Group also has deposits
in nancial institutions at a variable interest rate.
As at 31 December 2025:
– if the eective EUR interest rate on EUR deposits had increased/decreased by 1% (2024: 1%) on an
annual level, the net result due to changes in EUR deposits after tax for the reporting period would
have been EUR 320 thousand higher/lower (2024: EUR 369 thousand);
- if the eective USD interest rate on USD deposits had increased/decreased by 1% (2024: 1%) on an
annual level, the net result due to changes in USD deposits after tax for the reporting period would
have been EUR nil higher/lower (2024: EUR 1 thousand).
The following table presents the annual average interest rates exposure of nancial assets.
Average
interest rates
Average interest
rates
2025. 2024.
% %
Loans and receivables 0.00 0.09
Cash and cash equivalents 1.90 2.51
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
30 Financial risk management
(continued)
(d) Credit risk
Credit risk is the risk that one party to a nancial instrument will fail to discharge an obligation and cause
the other party to incur a nancial loss. Signicant risk is associated with high level of customer nance
receivables.
The internal directives to manage the credit risks have been tightened during 2015 with the
implementation of updated credit management framework and implementation of credit evaluation tools
to manage credit risks.
Credit Management function within the Group Treasury has been established to further assist the Group
in managing its credit risk exposure. New customers are only accepted on satisfactory completion of
a detailed credit check of the customer and a review of the related country risk. Outstanding credit
arrangements are monitored on a quarterly or annual basis depending on risk category. Impairment
losses are calculated by discounting receivables. Additionally, there is credit concentration risk as the
Group has a signicant portion of receivables outstanding from a small number of customers. As at 31
December 2025, the ve largest customers represent 75% of total net trade receivables (2024: 71%). The
Group considers that its maximum exposure to credit risk is reected in the amount of trade receivables
(Notes 14 and 16) and other receivables (Note 17), not including impairment for doubtful receivables. Ageing
analysis of these receivables is within the maturity analysis table shown further in this note.
Letters of credit are used as a method for securing payments from customers operating in certain
markets, in particular in markets with unstable political and/or economic environments. By having banks
conrming the letters of credit, the political and commercial credit risk exposures are mitigated.
Prior to the approval of new facilities reported as customer nance, an internal credit risk assessment
is conducted in order to assess the credit rating (for political and commercial risk) of each transaction. A
reassessment of the credit rating for each customer nance facility is made on a regular basis.
The Group denes customer nancing as any credit period longer than 179 days. The Group is working
closely with Croatian Bank for Reconstruction and Development (HBOR) and partnership banks to secure
risk mitigation. Provisions related to customer nance risk exposures are only made when they are
reliably measurable and where, after the nancing arrangement has become eective, certain events
occur which are expected to have a signicant adverse impact on the borrower’s ability and/or willingness
to service the outstanding debt. These events can be political (normally outside the control of the
borrower) or commercial, e.g. the borrower’s deteriorating creditworthiness.
Security arrangements for customer nance facilities normally include pledges of equipment and pledges
of certain of the borrower’s assets. If available, third-party risk coverage may also be arranged. “Third-
party risk coverage” means that a nancial payment guarantee covering the credit risk has been issued
by a bank, an export credit agency or other nancial institution. It may also be a credit risk transfer under
the so-called “sub-participation arrangement” with a bank, whereby the credit risk and the funding is taken
care of by the bank for the part covered by the bank. A credit risk cover from a third party may also be
issued by an insurance company.
Impairment of nancial assets
Cash and equivalents amounted to EUR 47,193 thousand as at 31 December 2025 (31 December 2024: EUR
58,733 thousand). Provisions for expected credit losses on cash and deposits amounted to EUR 128
thousand as at 31 December 2025 (31 December 2024: EUR 145 thousand). The Group’s write-os have
historically been low.
Trade receivables, receivables from related party and contract assets together amounted to EUR 69,146
thousand as at 31 December 2025 (31 December 2024: EUR 64,418 thousand). Provisions for expected credit
losses on trade receivables and receivables from related party amounted to EUR 264 thousand as at 31
December 2025 (31 December 2024: EUR 268 thousand). The Group’s write-os have historically been low.
(c) Price risk
The Group has insignicant exposure to debt securities price risk due to low investments and all
classied in the statement of nancial position at fair value through prot or loss (investments
funds).
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Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
30 Financial risk management
(continued)
(d) Credit risk (continued)
The following tables provide an ageing detail of current and overdue amounts in respect of all cus-
tomer loans and receivables as at 31 December 2025.
Table 1
Payment due date for total customer loans and receivables*
Due balance
Up to 3
months
3 months
to 1 year
1 to 3
years
Over 3
years
Total
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
2025
Foreign receivables 3,331 4,215 4,124 482 - 12,152
Domestic receivables 8,549 5,036 - - - 13,585
Receivables from related
parties
260 44,188 - - - 44,448
12,140 53,439 4,124 482 - 70,185
* excluding impairment allowance
2024
Foreign receivables 5,040 3,293 1,595 246 - 10,174
Domestic receivables 11,883 3,435 - - - 15,318
Receivables from related
parties
38,967 791 - - - 39,758
55,890 7,519 1,595 246 - 65,250
* excluding impairment allowance
Table 2 Ageing of total due customer loans and receivables
Up to 3
months
3 months
to 1 year
1 to 3
years
Over 3
years
Total
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
2025
Foreign receivables 3,331 - - - 3,331
Domestic receivables 8,423 11 34 81 8,549
Receivables from related parties 164 4 9 83 260
11,918 15 43 164 12,140
2024
Foreign receivables 3,711 526 803 - 5,040
Domestic receivables 11,135 582 137 29 11,883
Receivables from related parties 38,546 366 55 - 38,967
53,392 1,474 995 29 55,890
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
30 Financial risk management
(continued)
(e) Liquidity risk
Liquidity risk, also referred to as funding risk, is the risk that an enterprise will encounter di-
culty in raising funds to meet commitments associated with nancial instruments. As the Group
has no signicant commitments in nancial instruments, the risk lies only in its daily operations.
The Group has a strong focus on its cash ow with daily updates on actual development and
monthly updated forecasts. The Group’s maturity prole demonstrates the strong liquidity posi-
tion of the Group and therefore the risk is considered low. The table below presents the maturity
analysis and the resulting gap.
The Group has a revolving credit facility with our core banks should an extraordinary liquidity
need arise. As at 31 December 2025, the facility remained untapped.
2025
Up to 1
month
1–3
months
3–12
months
1–5
years
Over 5
years
Total
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
Loans and receivables - - 4 497 159 660
Trade and other receivables 63,494 2,972 6,334 - - 72,800
Current nancial assets 4,729 - - - - 4,729
Cash and cash equivalents 47,193 - - - - 47,194
115,416 2,972 6,340 497 159 125,384
Borrowings (3,390) (3,410) (603) - (3) (7,406)
Lease liabilities (207) (371) (1,617) (7,852) (3,658) (13,705)
Trade and other payables (28,683) (1,497) (10,490) (7,470) - (48,140)
(32,280) (5,278) (12,710) (15,322) (3,661) (69,251)
Maturity gap 83,136 (2,306) (6,370) (14,825) (3,502) 56,133
2024
Up to 1
month
1–3
months
3–12
months
1–5
years
Over 5
years
Total
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
Loans and receivables - - 70 993 204 1,267
Trade and other receivables 65,914 922 3,377 - - 70,213
Current nancial assets 4,393 - - - - 4,393
Cash and cash equivalents 58,733 - - - - 58,733
129,040 922 3,447 993 204 134,606
Borrowings (12) - - - (3) (15)
Lease liabilities (202) (356) (1,544) (7,394) (5,227) (14,723)
Trade and other payables (37,729) (8,307) (13,218) (8,249) - (67,503)
(37,943) (8,663) (14,762) (15,643) (5,230) (82,241)
Maturity gap 91,097 (7,741) (11,315) (14,650) (5,026) 52,365
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Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
30 Financial risk management
(continued)
(f) Fair value estimation
Financial assets at fair value through prot and loss are carried at fair value at the balance sheet
date. The fair value is estimated by reference to their quoted active market price at the balance
sheet date which represents Level 1 input (Note 18).
A market is regarded as active if quoted prices are readily and regularly available from an
exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices
represent actual and regularly occurring market transactions on an arm’s length basis. The quoted
market price used for nancial assets held by the Group is the current bid price. There are no
nancial assets derived from level 2 inputs which represent dierent valuation techniques based
on observable market data or from level 3 inputs which represent dierent valuation techniques
based on no observable market data.
The Group’s principal nancial instruments not carried at fair value are cash and cash equivalents,
trade receivables, other receivables, non-current loans and receivables, trade and other payables
and borrowings.
The fair value of loans and receivables and the fair value of interest-bearing borrowings are
calculated based on the Management’s best estimate of discounted expected future principal and
interest cash ows, using the market-related rate for a similar instrument at the balance sheet
date as a discount rate. Fair values and carrying amounts are not signicantly dierent as the
loans and receivables were granted at market rates, which were not substantially dierent from
market rates at the end of the reporting year. Current nancial assets are stated at fair value
that is based on quoted prices at the balance sheet date without any deduction for transaction
costs.
The carrying amount of cash and cash equivalents and of bank deposits reects fair value due to
the short-term maturity of these nancial instruments. Similarly, the amortized cost carrying
amounts of trade receivables and payables with remaining life of less than one year and which
are all subject to normal trade credit terms reect fair values. In 2025 1.87% (2024: 1.33%) interest
rates were used for determining fair values, which are based on available market rates for similar
nancial instruments.
(e) Liquidity risk (continued)
The Group participates in a supplier nance arrangement with the purpose of providing the
willing suppliers early payment compared with the related invoice payment due date as well as
arrangements for Group’s ecient cash ow management which allows the Group to centralize
payments of trade payables to the bank rather than paying each supplier individually and safeguard
the Group’s cash position.
From the Group’s perspective, the early payment arrangements do not extend payment terms
beyond the normal terms agreed with other suppliers that are not participating; on average, the
payment terms for invoices relating to participating suppliers are shortened by 60 days compared
with the normal terms agreed with other suppliers that are not participating. For the part of
arrangements related to cash ow management (with prolonged due date), the original invoices are
paid by the bank to suppliers on due date. Payment to the bank is deferred in average for 268 days
after the original invoice due date to suppliers.
Notes to the Consolidated Financial Statements of Ericsson Nikola Tesla Group (continued)
30 Financial risk management
(continued)
(g) Capital management
The Group’s objectives when managing capital are:
To safeguard the entity’s ability to continue as a going concern, so that it can continue to provide
returns for shareholders and benets for other stakeholders;
To provide adequate requirements for capital resources, as far as possible, by the retention of
prot;
To maintain a prudent balance sheet with adequate component of cash and short-term assets, as well
as equity and other investments; and
To secure adequate back-up funding facilities should a need arise.
The Group is generating sucient cash from operations to fund liabilities as they become due, nance
customers when required and budgeted investments, and pay dividends.
The Group monitors capital using the statutory minimum capital requirement. Shareholders’ equity is
disclosed in Note 20 to the consolidated nancial statements.
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E r i c s s o n N i k o l a T e s l a d . d .
Unconsolidated Financial
Statements
and Independent
Auditor’s Report
31 December 2025
Ericsson Nikola Tesla d.d.
Company prole
History and incorporation
Ericsson Nikola Tesla d.d. (the Company) is a Croatian company with over seventy years of
continuous operations. It is a leading supplier and exporter of specialized telecommunications
equipment, ICT solutions, software and services in Central and Eastern Europe.
The Company was founded on 13 May 1995, as a result of the privatization of the enterprise Nikola
Tesla - Poduzeće za proizvodnju telekomunikacijskih sistema i uređaja, po.
According to the ownership structure as at 31 December 2024, Telefonaktiebolaget LM Ericsson
(Ericsson) holds 49.07% of the Company’s shares. Other shareholders own the remaining 50.50% of
the Company’s shares and 0.43% is held as treasury shares.
Principal activities
The principal activities of the Company are research and development of telecommunications
software and services, design, testing and integration of total communications solutions, and
supply and maintenance of communications solutions and ICT solutions towards customers within
the Ericsson Group, customers in the Republic of Croatia, and Bosnia and Herzegovina, and several
customers in Central and Eastern Europe.
Ericsson Nikola Tesla d.d. is a joint-stock company incorporated in Croatia. The headquarters of the
Company are in Zagreb, Krapinska 45.
Code of Corporate Governance
The Company applies the Code of Corporate Governance of the Zagreb Stock Exchange and meets
the obligations derived therefrom, with the exception of provisions whose application is not
practical at the moment.
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Ericsson Nikola Tesla d.d.
Company prole (continued)
Supervisory Board, Audit Committee, Management Board and Executive
management of Ericsson Nikola Tesla d.d.
Supervisory Board
The Supervisory Board members during 2025 and up to the release of these statements were:
Luca Orsini Chairperson from 14 November
2025
Appointed on 14 November 2025
Stefan Kötz Chairperson until
14 November 2025
Appointed on 22 November 2024
Olgica Spevec Member; Deputy Chair Appointed on 13 June 2019; reap-
pointed for Deputy Chair of Su-
pervisory Board on 14 June 2023
Ana Vrsaljko Metelko Member Appointed on 29 June 2021
Petar Šimundža Member and employees’ repre-
sentative
Appointed on 29 November 2022
Carl Henrik Magnus Carle Member Appointed on 14 June 2023
Audit Committee
The Audit Committee members during 2025 and up to the release of these consolidated
statements were:
Olgica Spevec Chairperson Appointed on 17 December 2020
Vesna Vašiček Member Appointed on 21 February 2017
Carl Henrik Magnus Carle Member Appointed on 29 June 2023
Ericsson Nikola Tesla d.d.
Company prole (continued)
Management Board
The Management Board members:
Siniša Krajnović President of the Management Board Appointed on 25 September 2025,
e  e c t i v e o n 1 N o v e m b e r 2 0 2 5
Gordana Kovačević President of the Management Board until 1 November 2025, Appointed
on 9 April 2025, until then the only
member of the Management Board
Hrvoje Benčić member of the Management Board Appointed on 9 April 2025
Damir Bušić member of the Management Board Appointed on 9 April 2025
Milan Živković member of the Management Board Appointed on 9 April 2025
Resigned on 31 March 2026
Branka Vučemilo Elezović member of the Management Board Appointed on 1 January 2026
Executive management
Members of the Executive Management:
Siniša Krajnović President of the Management Board
Branka Vučemilo Elezović member of the Management Board[AS2.1][IM2.2] and Director, Legal
Hrvoje Benčić member of the Management Board and Director, Customer Solutions
and Services
Damir Bušić member of the Management Board and Director, Finance and Business
Operations
Milan Živković member of the Management Board and Director, Strategy and
Business Development and GIR
Andrej Grgurić Director, Research and Innovations
Antonija Lončar Director, Marketing and Communications
Branko Dronjić Director, IT&Test Environment Operations
Drago Holub Director, R&D Center
Goran Ožbolt Director, General Services
Ivan Barać Director, Sales and Marketing for Hrvatski Telekom and Crnogorski
Telekom
Jagoda Barać Director, Sales and Marketing for Export markets for Operators
segment
Miroslav Kantolić Director, Sales and Marketing for A1 Croatia, Telemach HR and
altenative operators
Tihomir Fabeta Director, ICT for Digital Society
Vjeran Buća Director, Sales and Marketing for Digital Society
Željko Antolić Director, Human Resources and Culture
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Ericsson Nikola Tesla d.d.
Unconsolidated statement of
comprehensive income
for the year ended 31 December 2025

|  | 2025. | 2024.
| Notes | EUR ‘000 | EUR ‘000
Sales revenue | 5, 6 | 233,354 | 243,082
Cost of sales | 7 | (205,459) | (215,727)
Gross prot |  | 27,895 | 27,355
Selling expenses | 7 | (5,831) | (5,714)
Administrative expenses | 7 | (6,296) | (5,972)
Other operating income | 7 | 4,873 | 13,611
Impairment loss on nancial assets |  | (17) | (20)
Operating prot |  | 20,624 | 29,260
Finance income | 9 | 929 | 1,523
Finance costs | 9 | (472) | (774)
Finance income/(costs), net | 9 | 457 | 749
Prot before tax |  | 21,081 | 30,009
Income tax | 10 | (3,776) | (7,539)
Prot for the year |  | 17,305 | 22,470
Other comprehensive income |  | - | -
Total comprehensive income for the year |  | 17,305 | 22,470
Earnings per share (EUR) | 11 | 13.03 | 16.95

Ericsson Nikola Tesla d.d.
Unconsolidated statement of
nancial position
as at 31 December 2025

|  | 2025 | 2024
Assets | Notes | EUR ‘000 | EUR ‘000
Non-current assets |  |  |
Property, plant and equipment | 12 | 13,848 | 14,769
Right of use assets | 29 | 12,901 | 14,096
Intangible assets | 13 | 2,123 | 1,146
Investments in subsidiaries | 15 | 4 | 4
Loans and receivables | 14 | 662 | 1,268
Deferred tax assets | 10 | 2,622 | 2,556
Total non-current assets |  | 32,160 | 33,839
Current assets |  |  |
Inventories | 16 | 9,909 | 8,581
Trade receivables | 17 | 23,251 | 23,606
Receivables from related parties | 30(c) | 44,809 | 40,035
Other receivables | 18 | 1,181 | 3,667
Prepayments |  | 2,238 | 2,540
Receivables for overpaid income tax |  | 376 | -
Financial assets at fair value through prot or loss | 19 | 4,471 | 4,393
Cash and cash equivalents | 20 | 39,289 | 49,316
Total current assets |  | 125,524 | 132,138
Total assets |  | 157,684 | 165,977

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Ericsson Nikola Tesla d.d.
Unconsolidated statement of
nancial position (continued)
as at 31 December 2025
Ericsson Nikola Tesla d.d.
Unconsolidated statement of
changes in equity
for the year ended 31 December 2025

|  | 2025 | 2024
Equity and liabilities | Notes | EUR ‘000 | EUR ‘000
Equity |  |  |
Share capital | 21 (a) | 17,674 | 17,674
Treasury shares | 21 (b) | (3,503) | (1,140)
Legal and other reserves | 21 (c) | 3,001 | 2,020
Reserve for treasury shares | 21 (d) | 6,803 | 7,413
Retained earnings |  | 40,314 | 36,969
Total equity |  | 64,289 | 62,936
Non-current liabilities |  |  |
Borrowings | 22 | 3 | 15
Lease liabilities | 29 | 11,479 | 12,545
Other non-current liabilities | 23 | - | 1
Employee benets | 24 (a) | 1,696 | 1,044
Total non-current liabilities |  | 13,178 | 13,605
Current liabilities |  |  |
Payables to related parties | 30 (c) | 13,974 | 15,969
Borrowings | 22 | 7,403 | -
Trade and other payables | 25 | 25,692 | 38,924
Income tax payable |  | - | 2,110
Provisions | 26 | 1,941 | 1,189
Accrued charges and deferred revenue | 27 | 13,668 | 14,755
Contract liabilities | 28 | 15,425 | 14,475
Lease liabilities | 29 | 2,114 | 2,014
Total current liabilities |  | 80,217 | 89,436
Total liabilities |  | 93,395 | 103,041
Total equity and liabilities |  | 157,684 | 165,977

| Share capital | Treasury shares | Legal and other reserves | Reserve for treasury shares | Retained earnings | Total
| EUR ‘000 | EUR ‘000 | EUR ‘000 | EUR ‘000 | EUR ‘000 | EUR ‘000
As at 1 January 2024 | 17,674 | (1,256) | 1,230 | 4,157 | 38,711 | 60,516
Changes in equity for 2024 |  |  |  |  |  |
Total comprehensive income | - | - | - | - | 22,470 | 22,470
Dividend distribution for 2023, Note 20 (e) | - | - | - | - | (19,880) | (19,880)
Purchase of treasury shares, Note 20(e) | - | (628) | - | - | - | (628)
Shares granted, Note 23 (b) | - | 744 | - | (744) | - | -
Transfer, Note 20 (c) | - | - | 790 | 4,000 | (4,790) | -
Share-based payments, Note 23 (b) | - | - | - | - | 458 | 458
Total contributions by and distributions to owners recognized directly in equity | - | 116 | 790 | (3,256) | (24,212) | (20,050)
As at 31 December 2024 | 17,674 | (1,140) | 2,020 | 7,413 | 36,969 | 62,936
As at 1 January 2025 | 17,674 | (1,140) | 2,020 | 7,413 | 36,969 | 62,936
Changes in equity for 2025 |  |  |  |  |  |
Total comprehensive income | - | - | - | - | 17,305 | 17,305
Dividend distribution for 2024, Note 20 (e) | - | - | - | - | (13,976) | (13,976)
Purchase of treasury shares, Note 20 (b) | - | (2,973) | - | - | - | (2,973)
Shares granted, Note 23 (b) | - | 610 | - | (610) | - | -
Transfer, Note 20 (c) | - | - | 981 | - | (981) | -
Share-based payments, Note 23 (b) | - | - | - | - | 997 | 997
Total contributions by and distributions to owners of the parent recognized directly in equity | - | (2,363) | 981 | (610) | (13,960) | (15,952)
As at 31 December 2025 | 17,674 | (3,503) | 3,001 | 6,803 | 40,314 | 64,289

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Ericsson Nikola Tesla d.d.
Unconsolidatd statement of
cash ows
for the year ended 31 December 2025

|  | 2025 | 2024
| Notes | EUR ‘000 | EUR ‘000
Cash ows from operating activities |  |  |
Prot before tax |  | 21,081 | 30,009
Adjustments for: |  |  |
Depreciation and amortization | 7, 12, 13,29 | 5,021 | 5,118
Impairment losses and reversals |  | (168) | (20)
(Gain)/loss on sale of property, plant and equipment |  | (152) | (55)
Net loss/(gain) on remeasurement of nancial assets |  | (78) | (158)
Amortization of discount |  | - | (2)
Interest income |  | (843) | (1,360)
Dividend income |  | (8) | (7,493)
Interest expense |  | 447 | 759
Foreign exchange (gain)/loss, net |  | 2 | (28)
Share-based payments | 24 (b) | 997 | 458
Changes in working capital: |  |  |
In receivables |  | 5,862 | (6,921)
In inventories |  | (1,328) | 1,200
In provisions |  | 1,403 | (259)
In payables |  | (7,288) | (3,278)
Cash generated from operations |  | 24,948 | 17,970
Interest paid |  | (448) | (752)
Income taxes paid |  | (5,756) | (6,294)
Net cash from operating activities |  | 18,744 | 10,924
Cash ows from investing activities |  |  |
Interest received |  | 807 | 1,347
Dividends received |  | 8 | 7,493
Proceeds from sale of property, plant and equipment |  | 145 | 49
Purchases of property, plant and equipment, and intangible assets |  | (3,931) | (2,296)
Deposits given to nancial institutions, net |  | 729 | -
Net cash used in investing activities |  | (2,242) | 6,593

Ericsson Nikola Tesla d.d.
Unconsolidated statement of
cash ows (continued)
for the year ended 31 December 2025

|  | 2025. | 2024.
| Notes | EUR ‘000 | EUR ‘000
Cash ows from nancing activities |  |  |
Repayment of borrowings | 22 | (7,275) | (1,256)
Purchase of treasury shares | 21 (b) | (2,980) | (627)
Dividends paid | 21 (e) | (14,137) | (19,897)
Payment of lease liabilities | 29 | (2,132) | (1,976)
Net cash used in nancing activities |  | (26,524) | (23,756)
Eects of exchange rate changes on cash and cash equivalents |  | (6) | (13)
Net increase/(decrease) in cash and cash equivalents |  | (10,028) | (6,252)
Cash and cash equivalents at the beginning of the year |  | 49,316 | 55,568
Cash and cash equivalents at the end of the year | 20 | 39,289 | 49,316

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Notes to the Financial Statements of Ericsson Nikola Tesla d.d.
1 Material accounting policies
Reporting entity
Ericsson Nikola Tesla d.d. (the Company) is a joint-stock company incorporated and domiciled in
Croatia. The address of its registered oce is Krapinska 45, 10000 Zagreb, the Republic of Croatia.
The Company’s shares are listed on the Public Joint-Stock Company listing on the Zagreb Stock
Exchange. A summary of the Company’s principal accounting policies is set out below.
Statement of compliance
The nancial statements have been prepared in accordance with International Financial Reporting
Standards adopted by the European Union (IFRSs). These nancial statements also comply with the
Croatian Accounting Act in eect on the date of issuing of these nancial statements. These nancial
statements are a translation of the ocial statutory IFRS nancial statements.
Basis of preparation
The nancial statements are prepared on the historical cost basis, with the exception of nancial
instruments which are carried at fair value. These comprise derivative nancial instruments and
nancial assets and liabilities at fair value through prot or loss. Policies have been consistently
applied to all the periods presented, unless otherwise stated (refer to Note 2).
The preparation of nancial statements in conformity with IFRSs requires management to make
judgements, estimates and assumptions that aect the application of policies and reported amounts
of assets and liabilities, income and expenses. The estimates and associated assumptions are based
on historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying values
of assets and liabilities that are not readily apparent from other sources. Actual results may dier
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised if the revision aects only
that period or in the period of revision and future periods if the revision aects both current and
future periods. Judgements made by the executive management in the application of IFRSs that have
signicant eect on the nancial statements and estimates are discussed in Note 4.
The Company has issued these separate nancial statements in accordance with Croatian
regulations. The Company has also prepared consolidated nancial statements as at 31 December
2024 and for the year then ended in accordance with IFRS for the Company and its subsidiaries (the
Group), which were approved by the Management Board on 29 April 2025. In the consolidated nancial
statements, subsidiary undertakings (listed in Note 15) and those companies in which the Group
indirectly has an interest of more than half of the voting rights or otherwise has power to exercise
control over the operations have been fully consolidated. Users of these non-consolidated nancial
statements should read them together with the Group’s consolidated nancial statements as at
and for the year ended 31 December 2024 in order to obtain full information on the nancial position,
results of operations and changes in nancial position of the Group as a whole.
Going concern
The executive management have a reasonable expectation that the Company has adequate
resources to continue in operational existence for the foreseeable future. The Company therefore
continues to adopt the going concern basis in preparing its nancial statements.
Functional and presentational currency
The Company’s nancial statements have been prepared in EURO (EUR), which is the currency of
the primary economic environment in which the entity operates (‘the functional currency’) and the
presentation currency have been rounded to the nearest thousand. The closing exchange rate as at
31 December 2025 was EUR 1,176 per USD (2024: EUR 1.044).
Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
1 Material accounting policies
(continued)
Revenue recognition
IFRS 15 “Revenue from Contracts with Customers” is a principle-based model of recognizing revenue
from customer contracts.
It has a ve-step model that requires revenue to be recognized when control over goods and services
are transferred to the customer.
The following paragraphs describes the types of contracts, when performance obligations are
satised, and the timing of revenue recognition. They also describe the normal payment terms
associated with such contracts and the resulting impact on the statement of the nancial position over
the duration of the contracts. The vast majority of the Company’s business is for the sale of standard
products and services.
Standard solution
Products and services are classied as standard solutions if they do not require signicant installation
and integration services to be delivered. Installation and integration services are generally completed
within a short period of time, from the delivery of the related products.
These products and services are viewed as separate distinct performance obligations. This type of
customer contract is usually signed as a frame agreement and the customer issues individual purchase
orders to commit to purchases of products and services over the duration of the agreement.
Revenue for standard products shall be recognized when control over the equipment is transferred
to the customer at a point in time. This assessment shall be viewed from a customer’s perspective
considering indicators such as transfer of titles and risks, customer acceptance, physical possession,
and billing rights. Control of an asset therefore refers to the ability to direct use of and obtain
substantially all of the remaining benets from the asset.
Furthermore, control includes the ability to prevent other entities from using and obtaining the benets
from an asset. The benets of an asset are the potential cash ows (inows or savings in outows)
that can be obtained directly or indirectly. For hardware sales, transfer of control is usually deemed to
occur when the equipment arrives at the customer site and for software sales, when the licenses are
made available to the customer. Software licenses may be provided to the customer at a point in time,
activated or ready to be activated by the customer at a later stage, therefore revenue is recognized
when customer obtains control of the software.
Contractual terms may vary; therefore, judgment will be applied when assessing the indicators of
transfer of control. Revenue for installation and integration services is recognized upon completion of
the service. Costs incurred in delivering standard products and services are recognized as costs of
sales when the related revenue is recognized in the Income Statement.
Costs incurred relating to performance obligations not yet fully delivered are recognized as inventories.
Transaction prices under these contracts are usually xed, and mostly billed upon delivery of the
hardware or software and completion of installation services. Customer nance agreements may be
agreed separately with some customers where payment terms exceed 179 days.
Revenue for recurring services such as customer support and managed services is recognized as the
services are delivered, generally pro-rata over time. Costs incurred in delivering recurring services
are recognized as cost of sales as they are incurred. Transaction prices under these contracts are
billed over time, often on a quarterly basis.
Contract liabilities or receivables may arise depending on whether the quarterly billing is in advance or
in arrears. Contract for standard products and services applies to business in all segments.
Customized solution
Some products and services are sold together as part of a customized solution to the customer. This
type of contract requires signicant installation and integration services to be delivered within the
solution, normally over a period of more than 1 year. These products and services are viewed together
as a combined performance obligation. This type of contract is usually sold as a rm contract in which
the scope of the solution and obligations of both parties are clearly dened for the duration of the
contract.
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Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
1 Material accounting policies
(continued)
Revenue recognition (continued)
Customized solution (continued)
Revenue for the combined performance obligation shall be recognized over time if progress of
completion can be reliably measured and enforceable right to payment exists over the duration of
the contract. The progress of completion is estimated by reference to the output delivered such
as achievement of contract milestones and customer acceptance. This method determines revenue
milestones over the duration of the contract, and it is considered appropriate as it reects the
nature of the customized solution and how integration service is delivered in these projects.
If the criteria above are not met, then all revenue shall be recognized upon the completion of the
customized solution, when nal acceptance is provided by the customer. Costs incurred in delivering
customized solutions are recognized as costs of sales when the related revenue milestone is
recognized in the Income Statement. Costs incurred relating to future revenue milestones are
recognized as Inventories and assessed for recoverability on a regular basis.
Transaction price under these contracts is usually a xed fee, split into a number of progress
payments or billing milestones as dened in the contract. In most cases, revenue recognized is limited
to the progress payments or unconditional billing milestones over the duration of the contract,
therefore no contract asset or contract liability arises on these contracts.
Customer nance agreements may be agreed separately with some customers where payment
terms exceed 365 days. Contract for customized solution applies to the Industry and Society business,
Business Support Systems (BSS) business, within the segment Digital Services, and the Media Solutions
business within the segment Emerging Business and Other.
Right to use (RTU)
The nature of Ericsson’s promise is to provide a right to use Ericsson’s IP as it exists (in terms of
form and functionality) at the point in time at which the license is granted to the customer. This means
that the customer can direct the use of, and obtain substantially all the remaining benets from, the
license at the point in time at which the license transfers.
Customer contract related balances
Trade receivables include amounts that have been billed in accordance with customer contract terms
and amounts that the Company has an unconditional right to, with only passage of time before the
amounts can be billed in accordance with the customer contract terms.
Customer nance credits arise from credit terms exceeding 179 days in the customer contract or
a separate nancing agreement signed with the customer. Customer nance is a class of nancial
assets that is managed separately from receivables. See note 31 (d) for further information on credit
risk management of trade receivables and customer nance credits.
In accordance with IFRS 15, where signicant nancing is provided to the customer, revenue is
adjusted to reect the impact of the nancing transaction. These transactions could arise from
the customer nance credits above if the contracted interest rate is below the market rate or
through implied nancing transactions due to payment terms of more than one year from the date
of transfer of control. The Company has elected to use the practical expedient not to adjust revenue
for transactions with payment terms, measured from the date of transfer of control, of one year or
less.
Contract asset is unbilled sales amount relating to performance obligation that has been satised
under customer contract but is conditional on terms other than only the passage of time before
payment of the consideration is due. Under previous standards these unbilled sales balances have
been included within trade receivables.
Contract liability relates to amounts that are paid by or due from customers for which performance
obligations are unsatised or partially satised. Under previous standards these balances have been
disclosed as deferred revenue within other current liabilities, and the Company concluded that the
balances meet the denition of contract liability under IFRS 15. Advances from customers are also
included in the contract liability balance.
Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
1 Material accounting policies
(continued)
Property, plant and equipment
Items of property, plant and equipment are shown at cost or deemed cost, less accumulated
depreciation and impairment losses.
The Company recognizes in the carrying amount of an item of property, plant and equipment the cost
of replacing part of such an item when that cost is incurred if it is probable that the future economic
benets embodied with the item will ow to the Company and the cost of the item can be measured
reliably. All other expenditure on repairs and maintenance is expensed as incurred. Where parts of an
item of property, plant and equipment have dierent useful lives, they are accounted for as separate
items of property, plant and equipment.
Land is not depreciated. Depreciation on other assets is provided on a straight-line basis to allocate their
cost over the estimated economic useful life of the assets. The estimated useful lives are as follows:
Useful lives
Buildings 5 – 30 years
Plant and equipment 2 – 10 years
Other 5 – 7 years
The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at
each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and
losses on disposals are determined by comparing proceeds with carrying amount and are included in the
statement of comprehensive income.
Intangible assets acquired separately
Intangible assets are stated on initial recognition at cost and subsequently at cost less accumulated
amortization and impairment losses.
Amortization is provided on a straight-line basis over the estimated useful lives of intangible assets.
Intangible assets include acquired computer software and are amortized on a straight-line basis over
their useful life of 2-4 years. Cost associated with maintaining computer software is recognized as an
expense as incurred.
Internally generated intangible assets
Expenses resulting from research activities are recognised as expenses for the period in which they
arise. Costs incurred for the development of products to be sold, leased, or otherwise marketed or
intended for internal use are capitalized as from when technological and economic feasibility has been
established until the product is available for sale or use.
Subsequent to initial recognition, internally developed intangible assets are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets
that are acquired separately. Amortization of capitalized development expenses is made according to the
straight-line method over their estimated useful lives, which is normally three years. Internally developed
intangible assets are included in software development and intangible assets under construction.
Impairment of non-nancial assets
Assets that have an indenite useful life (such as goodwill) are not subject to amortization and are tested
annually for impairment. Assets that are subject to amortization 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 recognized 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 identiable cash ows (cash-generating units). Non-nancial assets
other than goodwill that suered an impairment are reviewed for possible reversal of the impairment at
each reporting date.
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Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
1 Material accounting policies
(continued)
Financial assets at amortized cost
Financial assets are classied as amortized cost if the contractual terms give rise to payments
that are solely payments of principal and interest on the principal amount outstanding and the
nancial asset is held in a business model whose objective is to hold nancial assets in order to
collect contractual cash ows. These assets are subsequently measured at amortized cost using
the eective interest method, less impairment allowances. Interest income and gains and losses
from nancial assets at amortized cost are recognized in nancial income.
Financial assets at fair value through prot or loss (FVTPL)
A nancial asset is classied as held for trading if it is acquired principally for the purpose of
selling in the near term. Derivatives are classied as held for trading, unless they are designated
as hedging instruments for the purpose of hedge accounting. Assets held for trading are classied
as current assets. Debt instruments classied as FVTPL, but not held for trading, are classied on
the balance sheet based on their maturity date (i.e. those with a maturity longer than one year are
classied as non-current). Investments in shares and participations are classied as FVTPL and
classied as non-current nancial assets. Gains or losses arising from changes in the fair values
of the FVTPL category (excluding derivatives and customer nancing) are presented in the income
statement within nancial income in the period in which they arise. Gains and losses on derivatives
are presented in the income statement as follows.
Gains and losses on derivatives that hedge foreign exchange risks are presented as net foreign
exchange gains and losses. Gains and losses on customer nancing are presented in the income
statement as selling expenses. Dividends are recognised as other income in prot or loss when the
right to receive payment is established.
Cash and cash equivalents
Cash comprises cash held at banks and on hand. Cash equivalents include demand deposits and time
deposits with maturities up to three months. Cash and cash equivalents are carried at amortized
cost because: (i) they are held for collection of contractual cash ows and those cash ows
represent solely payments of principal and interest, and (ii) they are not designated at fair value
through prot and loss.
Impairment of cash, trade receivables and contract assets
Financial assets aected by the new model are cash and cash equivalents, deposits, trade
receivables and contract assets.
Two unied models were developed for relatable nancial assets. Cash equivalents and deposits
are assessed for impairment under one unied model and trade receivables and contract assets
are assessed for impairment under another unied model.
Cash equivalents and deposits are assessed based on probability of default as well as the
Company’s exposure to certain nancial institution at the time of default. To determine probability
of default, country credit rating of nancial institution is used, as well as the rating of future
outlook.
Expected loss on cash, cash equivalents and deposits for each nancial institution gives the total
expected credit loss. There were no signicant changes to the model during the year. The Company
has determined that credit risk largely depends on both the payment pattern of the customer
as well as the risk in the country where the customer resides (e.g. ability to make cross-border
payments).
Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
1 Material accounting policies
(continued)
Impairment of cash, trade receivables and contract assets (continued)
Therefore, expected credit losses (ECLs) are calculated using a provision matrix that species
a xed rate depending both on the number of days past due and the country risk rating. The
country risk ratings depend on the ratings used by all Export Credit Agencies within the OECD. The
rates dened in the provision matrix are based on historical loss patterns for certain portfolio
of customers. Each customer is regulatory monitored and these rates are adjusted for current
conditions as well as management expectations for changes to political risks and payment
patterns of certain customer in the future. There were no signicant changes to the model during
the year.
Trade and other payables
Trade and other payables are initially recognized at fair value and subsequently measured at
amortized cost using the eective interest rate.
Financial liabilities
Financial liabilities are recognized when the Company becomes bound to the contractual
obligations of the instrument. Financial liabilities are derecognized when they are extinguished, i.e.
when the obligation specied in the contract is discharged, cancelled or expires.
Inventories
Inventories are stated at the lower of cost and net realizable value. Net realizable value is the
estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses. The cost of other inventories is based on the First In First Out (FIFO) principle
and includes expenditures incurred in acquiring the inventories and bringing them to their existing
location and condition. In case of manufactured inventories, the cost includes materials, labor and
related overhead, and expenditure incurred in acquiring the inventories and bringing them to their
existing location and condition. Slow-moving and obsolete inventories have been written down to
their estimated realizable value.
Share capital
Share capital is stated in euro at nominal value.
Incremental costs directly attributable to the issue of new ordinary shares or options are shown
in equity as a deduction, net of tax, from the proceeds. Where the Company purchases its own
equity share capital (treasury shares), the consideration paid, including any directly attributable
incremental costs (net of income taxes) is deducted from equity attributable to the Company’s
equity holders until the shares are cancelled or reissued. Where such ordinary shares are
subsequently reissued, any consideration received, net of any directly attributable incremental
transaction costs and the related income tax eects, is included in equity attributable to the
Company’s equity holders.
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Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
1 Material accounting policies
(continued)
Income tax
The tax expense for the period is based on taxable prot for the year and comprises current and
deferred tax. Income tax is recognized in the statement of comprehensive income except to the
extent that it relates to items recognized directly in equity, in which case it is recognized in equity.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the company and its subsidiaries
operate and generate taxable income. Management periodically evaluates positions taken in tax
returns with respect to situations in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is recognized by using the balance sheet liability method on temporary
dierences arising between tax basis of assets and liabilities and their carrying amount in the
nancial statements. However, the deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the
time of the transaction does not aect either accounting or taxable prot or loss. Deferred tax
assets and liabilities are not discounted and are classied as non-current assets and/or liabilities
in the balance sheet. Deferred tax assets are recognized when it is probable that sucient taxable
prots will be available against which the deferred tax assets can be utilized. At each balance sheet
date, the Company reassesses unrecognized deferred tax assets and the carrying amount of
deferred tax assets.
Deferred income taxes reect the net tax eects of temporary dierences between the carrying
amounts of assets and liabilities for nancial reporting purposes and the amounts used for income
tax purposes. Deferred tax assets and liabilities are measured by using the tax rates expected
to apply to taxable prot in the years in which those temporary dierences are expected to be
recovered or settled based on tax rates enacted or substantially enacted at the balance sheet
date.
The measurement of deferred tax liabilities and deferred tax assets reects the tax
consequences that would follow from the manner in which the enterprise expects, at the balance
sheet date, to recover or settle the carrying amount of its assets and liabilities.
Foreign currencies
Transactions denominated in foreign currencies are translated into functional currency at the
rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in
foreign currency at the balance sheet date have been translated to functional currency at the
foreign exchange rate ruling at that date. Foreign exchange dierences arising from translation
are included in the statement of comprehensive income. Non-monetary assets and liabilities
denominated in foreign currencies that are stated at fair value are translated to functional
currency at foreign exchange rates ruling at the dates the values were determined.
Non-monetary assets and items that are measured in terms of “historical cost of a foreign
currency” are not retranslated.
Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
1 Material accounting policies
(continued)
Employee benets
a) Long-term service benets
The Company provides employees with jubilee and one-o retirement awards. The obligation and
costs of these benets are determined by using the Projected Unit Credit Method. The Projected
Unit Credit Method considers each period of service as giving rise to an additional unit of benet
entitlement and measures each unit separately to build up the nal obligation. The obligation is
measured at the present value of estimated future cash ows using a discount rate that is similar
to the interest rate on government bonds where the currency and terms of the government
bonds are consistent with the currency and estimated terms of the benet obligation.
b) Share-based payments
The Company operates an equity-settled, share-based compensation plan allowing the Company’s
employees to receive shares. The fair value of the employee services received in exchange for
the grant of the Company’s shares is recognized as an expense with a corresponding increase
in equity. The fair value is measured at grant date and spread over the period during which the
employees become unconditionally entitled to the shares. The total amount to be expensed over
the vesting period is determined by reference to the fair value of the shares granted. At each
balance sheet date, the Company revises its estimates of the number of shares that are expected
to become granted. It recognizes the impact of the revision of original estimates, if any, in the
statement of comprehensive income, with a corresponding adjustment to equity. When distributed
upon vesting date, treasury shares are credited at average purchase cost and recorded against
retained earnings.
c) Bonus plans
The Company recognizes a liability and an expense for bonuses as a provision where contractually
obliged or where there is past practice that has created a constructive obligation.
Provisions
A provision is recognized when the Company has a present obligation (legal or constructive) as
a result of a past event and it is probable (i.e. more likely than not) that an outow of resources
embodying economic benets will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and
adjusted to reect the current best estimate. The most signicant provisions in the nancial
statements are provisions for warranty claims, penalty claims and litigation. If the eect is
material and if the obligation is expected to be settled in a period of over 12 months, provisions
are determined by discounting the expected future cash ows at a pre-tax rate that reects
current market assessments of the time value of money and, where appropriate, the risks
specic to the liability. A provision for warranties is recognized when the underlying products or
services are sold. The provision is based on historical warranty data and a weighting of all possible
outcomes against their associated probabilities. The increase in the provision due to passage of
time is recognized as interest expense.
Interest income
Interest income is recognized using the eective interest method. When a loan and receivable
is impaired, the company reduces the carrying amount to its recoverable amount, being the
estimated future cash ow discounted at the original eective interest rate of the instrument
and continues unwinding the discount as interest income. Interest income on impaired loan and
receivables is recognized using the original eective interest rate.
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Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
1 Material accounting policies
(continued)
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, who is responsible for
allocating resources and assessing performance of the operating segments, has been identied as
the Management Board that makes strategic decisions.
Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortized cost; any dierence between the proceeds (net of transaction
costs) and the redemption value is recognized in the statement of comprehensive income over the
period of the borrowings using the eective interest method. Borrowings are classied as current
liabilities unless the Company has an unconditional right to defer settlement of the liability for at
least 12 months after the reporting date.
Government grants
Grants from the government are recognized within “Other operating income” at their fair value
where there is reasonable assurance that the grant will be received, and the Company will comply
with all attached conditions.
Government grants relating to costs are deferred and recognized over the period necessary to
match them with the costs that they are intended to compensate.
Grants relating to property, plant and equipment are recognized in prot or loss over the periods
and in the proportions in which depreciation on those assets is recognized. In statement of nancial
position, government grant is deducted in arriving at the carrying amount of the underlying asset
and is recognized in the prot or loss over the useful life of depreciable asset by way of a reduced
depreciation charge.
Dividend distribution
Dividend distribution to the Company’s shareholders is recognized as a liability in the Company’s
nancial statements in the period in which the dividends are approved by the Company’s
shareholders.
Investments in subsidiaries
Investments in subsidiaries in which the Company has an interest of more than one half of the
voting rights or otherwise has power to exercise control over the operations are recorded at
cost less impairment losses, if any. Impairment is tested annually whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
Investments in subsidiaries for which an impairment loss has been recorded are tested at each
reporting date for a potential reversal of impairment.
Dividend income is recognized when the right to receive payment is established.
Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
1 Material accounting policies
(continued)
Leases
As a lessee
As a lessee, the Company leases property and vehicles. Under IFRS 16, the Company recognizes
right-of-use assets and lease liabilities for most of these leases – i.e. these leases are on-balance
sheet.
At commencement or on modication of a contract that contains a lease component, the Company
allocates the consideration in the contract to each lease component based on its relative
stand-alone price.
However, for leases of property the Company has elected not to separate non-lease components
and account for the lease and associated non-lease components as a single lease component.
The Company uses a number of practical expedients when applying IFRS 16 to leases. In particular,
the Company:
• does not recognize right-of-use assets and liabilities for leases for which the lease term ends
within 12 months of the date of initial application;
• does not recognize right-of-use assets and liabilities for leases of low value assets; and
• excludes initial direct costs from the measurement of the right-of-use asset at the date of
initial application.
When measuring lease liabilities for leases that were classied as operating leases, the Company
discounted lease payments using its incremental borrowing rate, the weighted average rate
applied is 2.95% (2024: 2.81%).
As a lessor
The Company leases out its own property and the Company has classied these leases as
operating leases.
The Company sub-leases some of its properties. Under IFRS 16, the right-of-use assets recognized
from the head leases are presented in investment property and measured at fair value at that
date. The Company assessed the classication of the sub-lease contracts with reference to the
right-of-use asset rather than the underlying asset and concluded that they are operating leases
under IFRS 16.
The Company has applied IFRS 15 Revenue from Contracts with Customers to allocate
consideration in the contract to each lease and non-lease component.
2 Changes in accounting policies
There were no changes in accounting policies for the nancial year ending as at 31 December 2025
in comparison with prior reporting period.
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Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
3 New accounting standards and
interpretations
Adoption of new and amended International Financial Reporting Standards
Eective standards, amendments to standards and implementations –
adopted in 2025
Eective from 1 January 2025 the following standards, amendments or interpretations came into
force:
• Amendments to IAS 21 The Eects of Changes in Foreign Exchange Rates: Lack of Exchangeability
(issued on 15 August 2023);The amendments to IAS 21 introduce requirements for assessing when
a currency is exchangeable into another currency and when it is not. If a currency is determined
to be non-exchangeable, entities are required to estimate the spot exchange rate. The
amendments also introduce additional disclosure requirements. These changes apply to annual
reporting periods beginning on or after 1 January 2025, with early application permitted.
Adoption of these standards and amendments has not determined substantial eects on the
amounts recognized in balance sheet or income statement or impact on disclosure of accounting
policies.
Standards, amendments to standards and interpretations issued but not
yet eective
The standards, amendments to standards and interpretations that are issued, but not yet
eective, up to the date of issuance of the nancial statements are disclosed below. The Company
intends to adopt these standards, if applicable, when they become eective.
• Amendments to IFRS 9 Financial instruments and IFRS 7 Financial instruments: Disclosures:
Classication and measurement of Financial Instruments (issued on 30 May 2024; eective date 1
January 2026);
• Annual Improvements to IFRS Accounting Standards – Volume 11 (issued on 18 July 2024; eective
date 1 January 2026);
• Amendments to IFRS 9 Financial instruments and IFRS 7 Financial instruments: Disclosures:
Nature-dependent electricity contracts (issued on 18 December 2024; eective date 1 January
2026);
• IFRS 18 Presentation and Disclosure in Financial Statements (issued on 9 April 2024; eective date
1 January 2027);
• IFRS 19 Subsidiaries without Public Accountability: Disclosures (issued on 9 May 2024; eective
date 1 January 2027);
• Amendments to IAS 21 The Eects of Changes in Foreign Exchange Rates: Disclosures: Translation
to Hyperinationary Presentation Currency (issued on 13 November 2025; eective date 1
January 2027);
• Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates
and Joint Ventures: Disclosure: Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture (issued on 11 September 2014; eective date to be determined);
The Company is still in the process of assessing the impact of IFRS 18 and the related amendments,
particularly with respect to the structure of the Company’s statement of prot or loss, the
statement of cash-ows, other disclosures of MPMs and the grouping of nancial information.
Other amendments and standards are not expected to signicantly aect the Company’s nancial
statements.
Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
4 Critical accounting estimates
and judgements
Accounting estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. The Company makes estimates and assumptions concerning
the future. The resulting accounting estimates will, by denition, seldom equal the related
actual results. The estimates and assumptions that have a signicant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next nancial year are
discussed below.
(a) Impairment losses on loans and receivables
The Company reviews its receivables to assess impairment on a monthly basis. In determining
whether an impairment loss should be recorded in the statement of comprehensive income, the
Company makes judgements as to whether there is any observable data indicating that there is a
measurable decrease in the estimated future cash ows from a portfolio of loans and receivables
before the decrease can be identied with an individual loan or receivable in that portfolio. This
evidence may include observable data indicating that there has been an adverse change in the
payment status of borrowers in a group, or national or local economic conditions that correlate
with parameters relevant to assets in the Company.
(b) Derecognition of receivables with o-balance sheet nancing
From 2016, the Company entered into several new customer contracts in the foreign market. The
contracts include delivery of equipment and sale of services with 15% up-front payment while
remaining 85% have deferred payment terms up to 54 months.
The Company nanced the sale of equipment through a Supplier credit arrangement. The
arrangement includes:
(i) matching cash receipts from customer with payments to the bank, (ii) assignation of insurance
policy to the bank, and (iii) ceding future cash receipts from the customer to the bank through
special purpose accounts secured by special purpose deposits (Note 14).
By transferring to the bank its contractual right to receive the cash ows, the Company
transferred the nancial asset to the bank. In terms of derecognition criteria, the Company
analyzed transfer of risk and rewards of the receivable, specically related to credit risk and late
payment risk.
The credit risk is shifted from international customer to the risk from domestic insurance
company default which is considered as signicant transfer in credit risk. The Company issued
guarantees to the nancing bank for risk of non-performance by the insurance company which
is disclosed in Note 23. The issued guarantee for non-performance of the insurance company is
recognized initially at fair value and subsequently at the higher of the unamortized balance of the
initial fair value and the best estimate of expenditure required to settle the obligation under the
guarantee.
Late payment risk was transferred based on the fact that the special purpose deposit covers the
late payment charges and/or history of payments with the customer do not historically evidence
late payment risk as substantial to the agreement.
Having transferred the right to cash ows and substantially all the risk and rewards relating
to 90% of receivables, management concluded that it was appropriate to derecognize 90% of the
related receivables from the balance sheet. The remaining 10% of the receivables remain on the
balance sheet as long-term receivables from the customer (Note 14) and a 10% of the related
nancing liability to the bank is recorded as borrowings (Note 22).
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Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
4 Critical accounting estimates
and judgements (continued)
(c) Revenue recognition
The Company uses estimates and judgments in determining the amount and timing of revenue under
IFRS 15, particularly when determining the transaction price and its allocation to performance
obligations identied under the contract.
Transaction price may consist of variable elements such as discounts and contract penalties.
Transaction price, including variable considerations, is estimated at the commencement of the
contract (and periodically thereafter). Judgment is used in the estimation process based on
historical experience with the type of business and customer.
IFRS 15 also requires revenue to be allocated to each performance obligations by reference to
their stand-alone selling prices. The Company considers that an adjusted market assessment
approach should be used to estimate stand-alone selling prices for its products and services
for the purposes of allocating transaction price. These estimates are comprised of prices set
for similar customer and circumstances, adjusted to reect appropriate prot margins for the
market. Estimates are used to determine discounts that relate specically to each performance
obligations, thus impacting their stand-alone selling prices.
The Management applies judgment when assessing the customer’s ability and intention to pay in
a contract. The assessment is based on the latest customer credit standing and the customer’s
past payment history. This assessment may change during the contract execution, and if there is
evidence of deterioration in the customer’s ability or intention to pay, then under IFRS 15 no further
revenue shall be recognized until the collectability criteria is met. Conversely, this assessment may
also change favorably over time, upon which revenue shall now be recognized on a contract that did
not initially meet the collectability criteria.
Revenue for standard products shall be recognized when control over the equipment is
transferred to the customer at a point in time. This assessment shall be viewed from a customer’s
perspective considering indicators such as transfer of titles and risks, customer acceptance,
physical possession, and billing rights.
Control of an asset therefore refers to the ability to direct use of and obtain substantially all the
remaining benets from the asset. Control includes the ability to prevent other entities from using
and obtaining the benets from an asset. The benets of an asset are the potential cash ows
(inows or savings in outows) that can be obtained directly or indirectly. Judgment may be applied
in determining whether risk and rewards have been transferred to the customer and whether the
customer has accepted the products. In a sale of software license, judgment may also be applied
to determine when the software is made available to the customer by considering when they can
direct the use of, and obtain substantially all the benets of, the license. Often all indicators of
transfer of control are assessed together and an overall judgment formed as to when transfer of
control has occurred in a customer contract.
Revenue for customized solutions shall be recognized over time if progress of completion can be
reliably measured and enforceable right to payment exists over the duration of the contract. The
progress of completion is estimated by reference to the output delivered such as achievement
of contract milestones and customer acceptance. Judgment are applied when determining the
appropriate revenue milestones that best reect the progress of completion and are aligned with
key acceptance stages within the contract.
Notes to the Financial Statements of Ericsson Nikola Tesla d.d. (continued)
5 Sales revenue
Analysis of revenue by category:
6 Segment reporting
The Company has determined the operating segments based on the reports reviewed by the
Management Board that are used to make strategic decisions. The Management Board assesses
the performance of the operating segments based on a measure of adjusted Operating prot. The
measurement basis excludes the eects of administration expenses.
When determining the operating segments, the Company has looked at which market and to what
type of customers the Company’s products are aimed, and through what distribution channels
they are sold, as well as to commonality regarding technology, research and development.
To best reect the business focus and to facilitate comparability with the Ericsson Group, four
operating segments are reported:
• Networks include radio and transport solutions with supporting services, based on industry
standards and oered via scalable modular platforms. The portfolio enables customers to
evolve their telecom networks across generations to 5G.
• Digital Services include products and services providing solutions for our Telecom and In
dustry & Society customers’ digital transformation journeys across the support systems
BSS and OSS, Telecom Core, and IT Cloud domains through a combination of products, technology
and expertise in networks, software, cloud, and business processes.
• Managed Services are oered in three main areas: Networks, IT, and Network Design &
Optimization.
• Other includes products and services that enable content owners, broadcasters, TV ser
vice providers and network operators to eciently deliver, manage and monetize new TV
experiences. In addition, segment Other includes iconectiv and emerging business such as
Internet of Things and Unied Delivery Network (UDN).
2025. 2024
EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000 EUR ‘000
At a point in
time
Over time
At a point in
time
Over
time
Sales revenue from
products
49,565 38,548 11,017 55,410 46,146 9,264
Sales revenue from
services
183,789 164,655 19,134 187,672 171,016 16,656
233,354 203,203 30,151 243,082 217,162 25,920
The Management Board does not monitor assets and liabilities by segments and therefore this
information is not disclosed.