THE MANAGEMENT'S STATEMENT


The Corporate Compliance Program applies to all bodies, organizations, directors, officers and employees of Makedonski Telekom AD – Skopje, as well as to consultants, agents, representatives, and all other persons or bodies who carry out work on behalf of any company within the Company. Additionally, we expect our business partners, suppliers and customers to aid us in this effort by acting in a similarly ethical manner. As such, certain aspects of the Makedonski Telekom Corporate Compliance Program, apply not just to Makedonski Telekom employees, but also to third parties with whom we do business.

The Makedonski Telekom Corporate Compliance Program has been designed to ensure that the Company conducts its business to the highest standards of awareness, training, commitment, and adherence to applicable laws and regulations. To do so, requires the implementation of policies and procedures that address potential compliance risk areas together with identifiable mechanisms for reporting, investigating, monitoring, and correcting cases of suspected or actual non-compliance. It is a requirement that all employees and other effected parties guide their actions not only to the letter but also to the spirit of these guidelines.

It is critical that each of us recognizes and accepts personal responsibility for each of our individual actions in complying with the Company's ethical standards. As an aid and guideline we have policies supported by a comprehensive and ongoing training program.
It is only through our everyday actions and behavior consistent with these highest ethical standards that we can maintain our success. We will achieve our business objectives while maintaining our integrity and enhancing our reputation as an ethical leader in the telecommunications industry.

Nikola Ljushev
Chief Executive Officer

Elements of the Compliance Management System

The Management and Board of Directors of Makedonski Telekom are unanimous in their commitment that Makedonski Telekom AD – Skopje will conduct all business activities in accordance with the highest legal and ethical standards. In support of this commitment the Makedonski Telekom Corporate Compliance Program has been developed to create an internal culture where ‘Respect and Integrity’ is one of the most crucial values, consisting of the following elements.

The elements of Compliance Program is continuously tailored to the changes in the business sector, location of operation, business circumstances, culture and risks, international best practices.

The Compliance Program is reflected in the Code of Conduct which is accepted internally by all employees, and by all suppliers through Makedonski Telekom Procurement site.

The Compliance Officer is responsible for operation and monitoring the Compliance Programme.

Anti-corruption measures

Makedonski Telekom does not tolerate intention or transaction on corruption; therefore several internal policies and procedures have been developed to prohibit and prevent bribery (including making facilitation payments).

Makedonski Telekom intention is to comply with the anti-corruption rules relevant to the Company and it expects its business partners that they will not use money or other consideration paid by Makedonski Telekom for unlawful purposes, including purposes violating anti-corruption laws, such as make or cause to be made direct or indirect payments to any public official or private person in order to assist Makedonski Telekom or anyone acting on its behalf in obtaining or retaining business with, or directing business to, any person, or securing any improper advantage.
Makedonski Telekom prohibits any form of corruption or bribery including but not limited to providing or accepting or promising personal advantage, kick-backs or facilitation payments.

The Company also prohibits its employees to make decisions for the employees’ benefit or that of the employees’ family, friends, associates and acquaintances.

No gift or invitation to events can be granted to a third-party where they could affect or be perceived to affect the outcome of a business transaction.
Makedonski Telekom does not financially or morally support political parties, political organizations or their representatives. Its charitable contribution activities are disclosed on its internet site.

Makedonski Telekom does not intent to conduct any business with third parties who violate the anti-corruption regulations or the guiding principles of the Compliance Program.

Training system

In 2007 e-learning programs has been launched on business ethics and anti-corruption compliance. The business ethics programme is mandatory for all employees of the Group; to the anti-corruption e-Learning course employees are selected and invited after a risk based assessment.
Suppliers are required to register themselves on the Makedonski Telekom Procurement site thereby acknowledging the Group’s Code of Conduct and anti-corruption clause.

Effective system of internal controls

Makedonski Telekom’s management is committed to establish and maintain an adequate internal control system to ensure the reliability of the financial reports. Our internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in conformity with International Financial Reporting Standards (“IFRS”).

Transaction Level Controls describe the controls built into our business processes that have been designed and operated to ensure that material misstatements in each significant financial account and disclosure within the financial statements are prevented or detected in a timely manner. Parallel we document and evaluate the fundamental controls of internal control system based on the methodology of Deutsche Telekom.

In line with the criteria of the adopted internal control framework, management evaluates the effectiveness of internal control system within each financial year.
Complete evaluation of our internal control system is based on the method established in “Internal Control—Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The operation of the internal control system is supported also by the independent internal audit function. Beyond tasks regarding the risk based internal audit work plan, contributes to the enhancement of the internal control processes and to the reduction of existing risks through ad-hoc audits. The Internal Audit area follows up the implementation of the measures defined on the basis of the audits. The Board of Directors and the Audit Committee receives regular reports on the findings of the audits; measures, based on the findings and fulfillment of tasks.

Monitoring of the Compliance Program

A formal changes management system is applied continuously to monitor the design and effectiveness of the Compliance Program and to tailor it to the changes and new challenges in the business trends, environment and legislations.
Compliance Officer also provides quarterly reports to the Management Committee, Board of Directors and Audit Committee on the progress and results of the Compliance Program.

External verification and certification

In the period from 2010 to 2016 Magyar Telekom Group has done three certifications by which external auditors revised and confirmed the design of the Compliance Management System.

The results are available at: http://www.telekom.com/company/at-a-glance/compliance/98946.

Internal communication with employees

The Company takes the Code of Conduct and its detailed regulation seriously and consider its enforcement to be among our highest priorities, but it is also acknowledged that it is sometimes difficult to know right from wrong. That’s why the employees are encouraged to initiate open communication through an internally available Ask me! portal.

Reporting of the violation of the Compliance Programme, internal regulations or laws:
Complaints and Comments in connection to questions and misconduct of regulations can be submitted to “Tell me!” ethicsline of Makedonski Telekom.

Contact info for Tell me!
Makedonski Telekom
Address: Compliance Officer
Kej 13 Noemvri, No 6, 1000 Skopje
Phone: +389 2 3242530
E-mail: tell.me@telekom.mk

There is possibility for submitting the complaints to “Tell me!” portals of Magyar Telekom and Deutsche Telekom Groups:
Magyar Telekom Group
Address: Group Compliance Officer
1013 Budapest, Krisztina krt. 55., Hungary
Phone: +36 1 458 7780
E-mail: mondd.el@telekom.hu

Deutsche Telekom AG
140 Friedrich-Ebert-Allee, 53113 Bonn, Germany
Telephone: +8000 382 4835 (Monday - Friday, 9 a.m. - 5 p.m. GMT+1)
Fax: +8000 382 4329
E-mail: Tell-me@telekom.de
Internet: http://tell-me.telekom.de

We would like to draw your attention that complaints to the Deutsche Telekom Group’s Tell me! portal and Magyar Telekom Group’s Mondd el! (Tell me!) portal may only be made without the personal data of the person you wish to complain about. Any other unlawful personal data transfer may result in civil or criminal sanctions.
Comments and complaints can be sent anonymously.

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