Annual Report 2013

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THILO KUSCH, CHIEF EXECUTIVE OFFICER
OF MAKEDONSKI TELEKOM

ZARKO LUKOVSKI, CHIEF EXECUTIVE OFFICER
OF T-MOBILE MACEDONIA

PROFILE OF THE COMPANIES

Fixed and mobile network with superior quality, extraordinarily fast internet and entertainment contents with MaxTV are the first synonyms for Makedonski Telekom and T-Mobile Macedonia. Фиксна и мобилна мрежа со врвен квалитет, извонредно брз интернет и забавни содржини со MaxTV се првите синоними за Македонски Телеком и Т-Мобиле Македонија.
The Company whose focus are the two most important pillars of its business, the consumer and business customers, in its portfolio offers fixed and mobile services, as well as integrated solutions that are unique on the market in Macedonia.
The modernization of the networks and the innovations in terms of the access to attractive contents and applications are the main direction followed by Makedonski Telekom and T-Mobile Macedonia in the period 2012-2015 for achievement of the “connected life and work” concept.
Therefore, the main focus of the company plans is the development of products and offer of digitalized and personalized services available to the customers, regardless of whether they are at home, at work or on the move.

MACEDONIA IS THE FIRST EUROPEAN COUNTRY WITH AN INTERNET PLATFORM FOR AN EASIER LIFE.
The ALL-IP based fixed network, which Macedonia was the first in Europe to implement, provides a platform for development of new high-quality converged products and multimedia services.
It has the strategic significance of, let’s say, an ultra modern highway that provides high speed internet traffic. The last point is the end-user, whose life, via the new services that are supported by this platform, will be significantly facilitated, which will give the user extra time thanks to the new converged multimedia services with superior quality.
Thus, by connecting the home to this “highway” the end user becomes open for controlled and moderated devices via the internet, such as the TV set with MaxTV at present, and the other household appliances in the near future.
In the segment of information and communication technologies, the new platform can be used widely by the business customers as well because it provides integrated solutions for reduction of the costs and increase of the operational efficiency.
The society also benefits from the modernization of the networks. By sending the old technology to the history, the energy consumption is significantly lowered. Read More

Members of the Board of Directors on 31.12.2013 Makedonski Telekom AD - Skopje

Members of the Board of Directors on 31.12.2013 T-Mobile Macedonia AD-Skopje

Oliver Kosturanov, President and Non-executive member of the BoD
Thilo Kusch, Executive member of the BoD and Chief Executive Officer
Nazim Bushi, Vice President and Non-executive member of the BoD
Mihály Németh, Non-executive member of the BoD
Walter Goldenits, Non-executive member of the BoD
Janos Szabó, Non-executive member of the BoD
Susanne Krogmann, Non-executive member of the BoD
Thomas Panhans, Non-executive member of the BoD
Aleksandar Stojkov, Independent member of the BoD
Manojil Jakovleski, Independent member of the BoD
Tamás Vágány, Independent member of the BoD
Miklós Vaszily, Independent member of the BoD
Goran Ivanovski, Non-executive member of the BoD

Thilo Kusch, President and Non-executive member of the BoD
Zarko Lukovski, Executive member of the BoD and Chief Executive Officer
Slavko Projkoski, Executive member of the BoD and Chief Operating Officer
Mihály Németh, Non-executive member of the BoD
Susanne Krogmann, Non-executive member of the BoD
Walter Goldenits, Non-executive member of the BoD
Janos Szabó, Non-executive member of the BoD
Nebojsa Stajkovic, Non-executive member of the BoD
Irena Miseva, Non-executive member of the BoD
Ivanco Vucevski, Non-executive member of the BoD
Gzim Ostreni, Non-executive member of the BoD
Thomas Panhans, Independent member of the BoD
Tamás Vágány, Independent member of the BoD
Vladimir Zdravev, Independent member of the BoD

CORPORATE GOVERNANCE

MANAGEMENT AND GOVERNANCE OF MAKEDONSKI TELEKOM AD – SKOPJE
MAKEDONSKI TELEKOM STRUCTURE
SHAREHOLDERS’ STRUCTURE

Pursuant to the legal regulations and the Statute of Makedonski Telekom AD – Skopje (Makedonski Telekom/Company), the bodies of Makedonski Telekom are the Shareholders’ Assembly and the Board of Directors.
The corporate governance of Makedonski Telekom aims at ensuring better transparency by providing the following information:

Competences of the Shareholders’ Assembly of Makedonski Telekom AD - Skopje
Roles, responsibilities and members of the Board of Directors
The independent auditor
Other relevant information (acts of Makedonski Telekom and risk management)

Shareholders of Makedonski Telekom by 31.12.2013 inclusive

NAME OF OWNER	NUMBER OF SHARES	AS %
Stonebridge AD Skopje (in liquidation)	48.877.780	51,00
Government of the RM	33.364.875*	34,81
Makedonski Telekom AD - Skopje (Treasury Shares)	9.583.878**	10,00
IFC	1.711.219	1,79
Other minority shareholders	2.301.029	2,40
Total	95.838.781	100,00

* Including the preference cumulative share (golden share) with nominal value of MKD 9,733 owned by the Government of the Republic of Macedonia.
The golden share has one voting right and special rights in accordance with the Company Statute. It has restriction on tradable and non-tradable transfer.
** In accordance with the Law on Trade Companies (article 338) the rights attached to the acquired treasury shares are suspended. Read More

LAZAR POPOVSKI
CHIEF HUMAN RESOURCES OFFICER OF MAKEDONSKI TELEKOM AND
T-MOBILE MACEDONIA

MIROSLAV JOVANOVIC
CHIEF IT OFFICER OF MAKEDONSKI TELEKOM
AND T-MOBILE MACEDONIA

MOIRA HOMAN
CHIEF HUMAN RESOURCES DIRECTOR OF MAKEDONSKI TELEKOM AND
T-MOBILE MACEDONIA

THORSTEN ALBERS
CHIEF TECHNICAL OFFICER OF MAKEDONSKI TELEKOM AND T-MOBILE MACEDONIA

ZARKO LUKOVSKI
CHIEF EXECUTIVE OFFICER OF T-MOBILE MACEDONIA

GUSZTAV MAHLER
CHIEF OPERATING OFFICER CONSUMER OF MAKEDONSKI TELEKOM AND T-MOBILE
MACEDONIA

SLAVKO PROJKOSKI
CHIEF FINANCIAL OFFICER OF MAKEDONSKI TELEKOM AND T-MOBILE MACEDONIA
CHIEF OPERATING OFFICER OF T-MOBILE MACEDONIA

ALEKSANDAR POPOVSKI
CHIEF OPERATING OFFICER BUSINESS OF MAKEDONSKI TELEKOM AND
T-MOBILE MACEDONIA

Joint addressing of the Chief Executive Officer of Makedonski Telekom and the Chief Executive Officer of T-Mobile Macedonia
“Maintain-Transform-Innovate” was the direction which we followed in the past 2013. It was necessary for the company to pay attention and to focus on several areas in the course of 2013 if we wanted to keep the leading position, to remain leaders in the telecommunications and innovations in Macedonia and to remain the most profitable company. Primarily we had to simplify the organisational structure, to create partnerships with companies and individuals that share our vision and aspiration, to initiate and introduce innovations, but also to work on the development of the company's culture - customer orientation always and above all.

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OUR STORY
FOR 2013

NEW TECHNOLOGIES

WITH THE STATE-OF-THE-ART TECHNOLOGY AND INFRASTRUCTURE, WE HAVE CREATED POSSIBILITIES FOR SHARING UNFORGETTABLE MOMENTS AND EXPERIENCES FOR ALL OUR CUSTOMERS.
THE FUTURE STARTS FROM MACEDONIA
We have the largest and the best network, the most modern technology, we are the first on the market and we offer products and services with the highest quality.
We constantly strive towards a flawless maintenance and development of a network which is even more advanced technology-wise because we are aware that by means of development and constant perfection of the network, we are helping the modernization of the citizens, the economy and the entire country.
In 2013, the companies continued with the development of all network segments: access, core network and transport network, as well as service platforms.
MACEDONIA IS THE FIRST COUNTRY IN EUROPE WITH AN ALL IP NETWORK CRUCIAL MOMENTS RELATED TO IMS:
- BY THE END OF 2013, 99.9% OF THE CUSTOMERS HAVE BEEN MIGRATED.
- FULL MIGRATION COMPLETED ON 15TH JANUARY 2014.
- AN INVESTMENT WORTH EUR 13 MILLION.

TWO OCEANS OF OUR BUSINESS

EVERYTHING FOR THE CUSTOMER! PROVIDING SIMPLE AND MODERN CUSTOMER SOLUTIONS WITH A UNIQUE HIGH QUALITY AND DISTINCTIVE VALUE CONTRIBUTE FOR STRENGTHENING THE RELATION WITH THE CUSTOMERS AND FOR ADDITIONAL MOTIVATION IN THE IMPROVEMENT OF THE OPERATION OF THE COMPANIES.
Operating in a highly competitive environment in all telecommunication segments, Makedonski Telekom and T-Mobile are focused on new services, on retaining the existing customers and acquiring new ones. Marketing activities based upon the needs and habits of the customers are being implemented in order to build strong relations with the customers.
Loyalty programmes and schemes for upgrading the telephone devices are also being intensively used in order to increase the customer satisfaction.
Makedonski Telekom provides traditional fixed line telecommunications telephony and content services within the scope of the fixed network, as well as broadband services and integrated solutions, including also television via Internet Protocol.
The objectives of the company for the upcoming years entail retaining the leadership position in the sphere of technology in Macedonia and providing high-quality services at affordable prices in order to retain the competitiveness on the market.
In 2013, the main focus on the market of fixed line services was placed both on attracting new customers and retaining the existing ones, as well as on migration towards bundled services, primarily 3Max.
FOR GREAT B2B POSSIBILITIES

WE ARE PIONEERS IN INNOVATION, WE BRING PROGRESS, WE LEAD THE DEVELOPMENT OF THE TELECOMMUNICATIONS INFRASTRUCTURE IN MACEDONIA.
Optimization of the IT architecture by consolidation and modernization of the IT systems and infrastructure was the main focus in 2013 in the sphere of information technology. Following the corporate strategy for simplification of processes, improving the support and automation of the corporate processes was the main goal, in order to improve the One Company customer experience.
In 2013, the IT team had the first experience to offer professional services for system integration and implementation of a software solution to an external customer. This was also the first international project where the IT team, together with the partner, implemented Mediation Zone as a mediation solution for the LTE service in Crnogorski Telekom.

THE EMPLOYEES

OUR EMPLOYEES ARE THE DRIVING FORCE THAT ENABLES US: TO CONTINUOUSLY ADAPT AND TO CREATE VALUE FOR US AND FOR OUR SHAREHOLDERS, TO BE ON THE TOP.
Dynamics, simplicity and being first on the market! Continuously following all new global trends or being a creator of those trends. Today’s society is dynamic! Keeping the leading position requires constant innovation, constant work and a lot of efforts, creating favourable working conditions for the employees, their motivation and excellent communication with the customers.
AWARDS
National Award for best socially responsible practices in the category “Relations with the employees”, awarded by the National Body for Corporate Social Responsibility of Enterprises of the Republic of Macedonia.
MAGENTA AWARDS FOR MACEDONIA
The Magenta Award, which is awarded for projects in the sphere of corporate communications at the level of the Deutsche Telekom Group every two years, this time was presented to the internal communication team of Makedonski Telekom and T-Mobile Macedonia, who were given two statuettes! The bronze was awarded for the T-Dance project, while the silver for Mission Impossible, a video clip created in the course of the Kick-off Meeting 2013.
SILVER FOR MISSION IMPOSSIBLE
BRONZE FOR T-DANCE
INNOVATIONS

Heart of every strategy

INNOVATIONS ARE THE HEARTH OF SUCCESS AND THE STRATEGIC ROAD TO GREAT ACHIEVEMENTS… THEY REQUIRE COURAGE, PASSION AND PATIENCE, BUT ALSO LEAD TO EXCELLENT RESULTS AND VICTORIES...
We have a responsibility to lead the change!
5 innovation projects, 5 platforms of the future: Makedonski Telekom and T-Mobile Macedonia through a Public Call for innovation partner started with implementation of innovative projects. 78 proposals were submitted within the contest by various entities such as universities, start-up companies, and individual innovators. As a result of the process, 5 projects were selected that were developed and implemented jointly with the selected partners:
„Smart Wine“ (Integrated end-to-end M2M cloud solution for intelligent monitoring of agriculture parameters by using wireless sensor network)
„Т-Care“ (Multi-user platform for online customer care, based on artificial intelligence)
“Cloud Message” (Distributed web-based social network for sharing messages, private or public, and advertisement coupons, depending on the user’s preference, with a mobile augmented reality based client)
“DoxBee”(Cross-platform system for collaboration with MS office documents) “MarketKonekt” (B2B/B2C online trading platform in Macedonia)

CORPORATE SOCIAL RESPONSIBILITY

OUR THOUGHTS AND ACTS ARE DIRECTED TOWARDS A SOCIETY IN WHICH LIFE IS NOURISHED IN THE INTEREST OF THE FUTURE GENERATIONS.
Our strategic goal is to become a global leader in connected life and work. For us, it means also a leader in corporate social responsibility. Actually, it is an integral part of our strategy. Being among the most significant players in the Macedonian business environment, we have the responsibility to set standards and to be the driving force in the development of society and all its segments – ecological, economic and social sphere. From products and services, through infrastructure and logistics, all the way to our employees – our strategy for corporate social responsibility stretches through all spheres of our daily operation.

> SEE ACTIVITIES

RESPONSIBLE CITIZEN OF THE SOCIETY

OUR THOUGHTS AND ACTS ARE DIRECTED TOWARDS A SOCIETY IN WHICH LIFE IS NOURISHED IN THE INTEREST OF THE FUTURE GENERATIONS.

Our strategic goal is to become a global leader in connected life and work. For us, it means also a leader in corporate social responsibility. Actually, it is an integral part of our strategy. Being among the most significant players in the Macedonian business environment, we have the responsibility to set standards and to be the driving force in the development of society and all its segments – ecological, economic and social sphere. From products and services, through infrastructure and logistics, all the way to our employees – our strategy for corporate social responsibility stretches through all spheres of our daily operation.

FINANCIAL REPORTS

MAKEDONSKI TELEKOM AD – SKOPJE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2013 with the report of the auditor thereon

These consolidated financial statements relate to the group of Makedonski Telekom AD - Skopje, which includes Makedonski Telekom AD - Skopje, T-Mobile Macedonia AD Skopje and e-Macedonia foundation – Skopje (hereinafter referred as: “the Group”).

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