Ericsson Nikola Tesla d.d. (the Company) is a Croatian company with a continuity longer than fifty years. It has always been the leading specialized supplier and exporter of telecom equipment, software solutions and services in Central and East Europe.

The Company was founded as a result of the privatisation of the enterprise Nikola Tesla - Poduzeće za proizvodnju telekomunikacijskih sistema i uređaja, po. – i.e. the legal form characteristic for the economic and legal system in the former Yugoslavia, which did not specify the owner of the enterprise.

The Company was incorporated on 13 May 1995 and on the same date it was registered in the Court Register with an initial share capital of HRK 501,366,225. The Company was registered with the Trade Court in Zagreb on 13 June 1995. Following the decision of the General Assembly of the shareholders made on 17 December 1998, the base capital of the Company amounting to HRK 501,366,225 was reduced by HRK 101,871,225 and now it is HRK 399,495,000. The reduction of the base capital was carried out by reducing the nominal value of the issued shares from DEM 100 to HRK 300. The difference of the value was paid out to the shareholders.

According to the current ownership structure, Telefonaktiebolaget LM Ericsson (Ericsson) is the major single shareholder of the Company and it owns 49.07% of shares, the remaining shareholders own 48.60% of shares, while the Croatian Privatisation Fund owns 2.33% of shares.

Principal activities

The principal activities of the Company are the following: development of telecommunications software and services, design and integration of total communications solutions for operators and enterprises as well as testing, sales and maintenance of communications solutions and systems in the Republic of Croatia, Central and East European markets as well as other companies within the Ericsson Group.

Directors and management

Supervisory Board

Supervisory Board members during 2000 and up to the release of these statements were:

Board

The board has only one member:

Executive management

As of 31 December 2000, the Company’s executive management comprised of:

Statement of responsibilities of the Board

Pursuant to the Croatian Accounting Law (90/92), the Board is responsible for ensuring that financial statements are prepared for each financial year in accordance with International Accounting Standards (IAS) which give a true and fair view of the state of affairs and results of the Company for that period.

In preparing those financial statements, the responsibilities of the Board include ensuring that:

	suitable accounting policies are selected and then applied consistently;
	judgements and estimates are reasonable and prudent;
	applicable accounting standards are followed, subject to any material departures disclosed and explained in the financial statements; and
	the financial statements are prepared on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Board must also ensure that proper accounting records are kept which disclose with reasonable accuracy at any time the financial position of the Company and must also ensure that the financial statements comply with the Croatian Accounting Law (90/92). The Board is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Signed on behalf of the Board.

Åke Enell

Ericsson Nikola Tesla d.d.
Krapinska 45, 10000 Zagreb, Republic of Croatia